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Worksheets2.04 FP1
Total questions: 19
Worksheet time: 10mins
Ownership investments are ideal for investors who are:
risk-averse.
risk-tolerant.
close to retirement.
just beginning to invest.
Which is a disadvantage of investing in a savings account?
The account's potential for loss is high.
The rate of return fails to keep up with inflation.
One must pay a penalty for withdrawing money early.
A minimum balance is required to keep the account active.
Which is a factor that determines how much investment risk a person can handle?
goals
income
social status
banking institution
Which is an advantage of investing in bonds?
They are very low risk.
They are insured by the FDIC.
They offer extremely high rates of return.
They permit people to access their money at any time.
Which is an example of a lending investment?
bonds
stocks
antiques
real estate
Which is an advantage of a money market account over a savings account?
The rate of return on a money market account is significantly better.
Money market accounts provide corporate ownership rights.
One can often write checks from a money market account.
Money market accounts are insured by the FDIC.
In investing, legal lending or owning agreements between individuals, businesses, or governments are known as:
bonds.
guarantees.
securities.
treaties.
Which statement is true about certificates of deposit?
They may depreciate in value.
The riskiest investment is a certificate of deposit.
One must pay a penalty for withdrawing money early.
Certificates of deposit are issued by corporations or governments.
Investors take a risk for the potential of receiving a:
bonus.
prize.
promotion.
return.
The purpose of the risk pyramid is to show a comparison of:
one stock to another.
one investment to another.
stocks to stock mutual funds.
corporate bonds to municipal bonds.
Which is an example of a real estate investment?
a corporate bond
a certificate of deposit
partial ownership of a corporation
land to be developed in the future
With an ownership investment, investors:
buy a home to live in.
collect popular items.
invest in multiple corporations.
pay for the right to own something.
Which are often considered one of the safest investments?
commodities
penny stocks
precious metals
government bonds
One of the biggest risks to a real estate investment is:
depreciation
a low rate of return
lacking FDIC insurance
the inability to write checks
Which statement most accurately describes the relationship between risk and return?
For the potential of a low return, an investor usually accepts no risk.
For the potential of a high return, an investor usually accepts a low risk.
For the potential of a low return, an investor usually accepts a high risk.
For the potential of a high return, an investor usually accepts a high risk.
What type of investment involves several people pooling their money to purchase stocks and bonds?
secure
elective
mutual funds
money market accounts
A disadvantage of owning stocks is the:
high degree of risk.
low potential for return.
penalty for early withdrawal.
potential for loss of time and effort.
With a lending investment, investors:
avoid taking any risk.
hire a financial advisor
allow borrowers to use their money for a price.
maintain a minimum amount of money in the investment.
Which type of investment involves the ownership of items that are worth far more than originally sold for because of rarity and/or popularity?
stocks
collectibles
real estate
stock mutual funds
