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WorksheetsUnit 3-Saving and Investing
Total questions: 49
Worksheet time: 43mins
Many people are advised by financial advisors to take risks. However risks are not for everyone. Which of the following people should NOT take risks in investing?
People close to retirement age
Young people
People who are meeting or exceeding their retirement goals
People who have recently received an unexpected sum of money
Which of the following is NOT a recommended strategy when investing in stocks?
Avoid investing solely in individual stocks
Sell your stocks when the market is going down
Hold onto your stocks, and don’t sell them even when the market goes down.
Buy when the price is low.
Investing is for the short-term, while saving is for long-term.
True
False
Many financial advisors recommend that investors diversify their investment portfolio. Which of the following is NOT true about a diverse investment strategy?
It protects against risk
It is a strategy of having many different types of investments.
You will not lose any money with this strategy.
You will have a mix of risky and safe investments.
A ________ allows you to store your money in a bank while earning interest.
savings account
checking account
municipal bond
mutual fund
A great rule of thumb is to
pay your bills first
pay yourself first
start saving and investing when you turn 30
save all the money left over at the end of the month
Kaitlyn is 19 years old, and her grandmother recently passed away. She was surprised to learn that her grandmother left her $500,000 in her will. Which mid-risk investment would you recommend for Kaitlyn?
a regular savings account
US Government Savings Bonds
Mutual funds
Money Market account
Which of the following is NOT a common reason that teens today are saving their money?
Saving for a car
Saving for retirement
Saving for college
Saving for a trip at graduation
Tyler is 62 and married, He is hoping to retire next year, and he is evaluating his investment options. He currently has $3,000,000 to invest. Which low-risk investments would be the BEST choice for Tyler?
Municipal bonds
Junk bonds
An individual stock
All of the choices would be good investments for Tyler
Using the Rule of 72, calculate how approximately how long it will take to double your money if your money is earning a 6% interest rate.
12 years
13 years
14 years
15 years
Using the Rule of 72, calculate approximately how long it will take to double your money if your money is earning a 8% interest rate.
5 years
8 years
9 years
10 years
How does the Rule of 72 assist savers and investors?
Gives a general idea of what year to retire.
Determines an appropriate level of risk for a given investment
Allows investors to approximate how long it will take to double their money.
Shows the best investment 72 months into the future.
Interest earned on interest gained is _____________
compound interest
simple interest
principal
a dividend
_____________ is the original sum invested.
Principal
A dividend
Interest
Interest rate
Using the Rule of 72, calculate how approximately how long it will take to double your money if your money is earning a 10% interest rate.
2 years
7.2 years
5 years
10 years
Using the simple interest formula, calculate the interest earned on $1,200 after 1 year at 4% return.
$48.00
$4.80
$84.00
$8.40
Which founding father coined the phrase “Money makes money, and the money that money makes, makes more money?”
George Washington
Thomas Jefferson
Benjamin Franklin
James Madison
In the formula to calculate simple interest, what does the p stand for?
principal
pi
patience
price
Using the simple interest formula, calculate the interest earned on $25,000 after .5 years at 3% return.
$375.00
$750.00
$37.50
$75.50
In the formula to calculate simple interest, what does the i stand for?
interest time
interest
interest rate
amount invested
In the formula to calculate simple interest, what does the t stand for?
tiramisu
time
target
table
Using the simple interest formula, calculate the interest earned on $1,500,000 after 1 year at 4% return.
$60,000.00
$600,000.00
$6,000.00
$600.00
In the formula to calculate simple interest, what does the r stand for?
rational
interest rate
ratio
right
The formula to calculate simple interest is
i=psd
i=prt
r=pit
i=blt
Using the simple interest formula, calculate the interest earned on $7000 after 2 years at 8% return.
$112.00
$1,120.00
$11,200.00
$11.20
Using the simple interest formula, calculate the interest earned on $150 after 1 year at 6% return.
$90.00
$0.09
$9.00
$4.00
Which of the following is NOT a risk when investing in real estate?
tenants may not pay rent
tenants may destroy your property
real estate values may increase
real estate values may decrease
The best way to diversify your stock portfolio is to
invest in a few good companies you like
invest in mutual funds and ETFs
invest all your money is a great company, like Microsoft or Walmart
There is no way to diversify stocks. Avoid them.
Identify the investment:- many stocks are included in this type of investment- considered the safest way to invest in the stock market
dividend
bonds
ETFs
commodities
Marcus has received a $20,000 gift for graduating high school, and he wants to invest is money in the stock market. Which of the following would NOT be able to help him?
websites such as e-Trade or Vanguard
real estate agents
a stockbroker
a financial advisor
Where would you go to open up a savings account, certificate of deposit, or money market account?
stockbroker
bank or credit union
real estate agent
insurance agent
In the formula to calculate simple interest, what does the p stand for?
principal
pi
patience
principle
Which of the following investments signifies ownership in a corporation?
stocks
bonds
real estate
commodities
Which of the following investments is NOT in the Stock Market?
mutual funds
ETFs
real estate
individual stocks
Identify the investment:- pools similar stocks together- the most popular type of investment- safer than investing in individual stocks
mutual funds
bonds
real estate
commodities
Identify the investment:- natural resources- minerals- food staples
commodities
real estate
stocks
bonds
Which of the following is NOT a type of savings account?
money market account
mutual fund
certificate of deposit
traditional savings account
Identify the investment:- risky- ownership in a corporation- pays dividends- potential for reward is high
stocks
bonds
commodities
real estate
Rank these investments from safest to riskiest:
Savings accounts, ETFs, Bond, Individual stocks
Savings accounts, Bonds, ETFs, Individual stocks
Savings accounts, ETFs, Individual stocks, Bonds
Bonds, Savings accounts, Individual stocks, ETFs
Who assists you in purchasing real estate?
stockbroker
real estate agent
an insurance agent
a police officer
When adults hear the word investing, they usually think about the stock market.
True
False
Identify the investment:- the investor loans money to a city or county government, or a company- money is repaid after a certain date, plus interest is paid- generally considered a safe investment, although not insured by the FDIC
bonds
ETF
savings accounts
mutual funds
Identify the investment:- insured by the FDIC- earns higher interest than a traditional savings account- requires a higher balance than a traditional savings account
ETF
money market account
bonds
stocks
Identify the investment: - insured by the FDIC - lowest interest rate of all investments - in most cases, you can make up to 3 withdrawals per month
money market
traditional savings accounts
ETFs
CDs
A profit earned by owning stocks is a dividend.
True
False
You have been asked to share and explain three of your favorite types of investments with a group of 5th graders. What will you tell them?
Explain what is meant by having a diverse investment portfolio.
Explain the relationship between risk and reward. Use at least one example in your explanation.
Identify and explain the financial concept referred to in the Benjamin Franklin quote, “Money makes money, and the money that money makes, makes more money.”
