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WorksheetsInvesting Review
Total questions: 13
Worksheet time: 7mins
A key difference between saving and investing is
Saving is for everyone, investing is for the wealthy
Your money is insured when investing, it is not in savings
Investing has a guaranteed return, savings does not
Saving is for emergencies & goals, investing is for long-term wealth
Why is it important to start investing as soon as possible?
You take less risk when you are young, so money will be safe
You have more time for your money to compound
Investing is an easy way to make quick money
Fees on investments are cheaper when you are younger
The possibility of losing all or part of your investment is known as
asset allocation
compounding
return
risk
Generally, how is risk related to return?
the lower the risk, the greater the possibility of a high return
the greater the risk, the greater the possibility of a high return
the greater the risk, the greater the possibility of a low return
risk and return have no relationship
A single share of ownership of a company is called a:
Bond
Mutual Fund
Annuity
Stock
Stocks are low risk investments options.
True
False
Leaving your investments in the stock market alone for at least five years is a good way to reduce risk because…
It allows your investments to earn more interest
Fees are waived for investments held for over five years
You get a bonus from the company if you invest for five years
It keeps you from reacting to dips in the market and selling at too low of a price
This is considered an IOU and the higher the interest rate (or coupon rate) on this, the more risky it is
Bond
T-bill
Money market
Stocks
Which of the following is a way to start investing?
Purchase stocks on your own
Pool money into a mutual fund managed by an advisor
Purchase part of an index fund
Hire a financial advisor to make a plan for you
All options are correct
All of the following are strategies to reduce risk EXCEPT…
Investing small amounts of money over longer periods of time
Hiring an investment manager who can make trades fast enough to beat the market
Making sure your investments are diversified
Holding your investments for at least five years
Which of the following is TRUE about owning a share of stock?
The value of a share is set by the company and never changes.
You have to return the share of the company you own typically after 5 years, otherwise, you pay a penalty fee each year.
Companies lose significant amounts of money every time someone buys a share.
Owning a share means you own a percentage of the company.
Which of the following statements about having a financial planner manage your investment portfolio is TRUE?
Financial planners charge fees that will reduce your overall profits.
You don't have a say in how you want your portfolio managed with a financial planner.
Financial planners are guaranteed to beat the market all the time.
Having a manager often costs less than managing the portfolio yourself.
