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WorksheetsInvesting
Total questions: 12
Worksheet time: 12mins
What is a key difference between saving and investing?
Saving is for long-term goals; investing is for short-term goals
Saving earns a much higher rate of return than investing your money
Saving guarantees you the money you put away while investing has no guarantees.
Saving earns compound interest while investing earns simple interest
Select the best definition of compound interest.
Compound interest is earning interest on the original amount you deposited.
Compound interest is earning interest on the original amount you deposited plus any interest earned.
Compound interest is the amount of interest you are charged on your bank account each month.
Compound interest is earning a fixed dollar amount on your bank account each month.
What is a stock?
A stock is a type of investment that uses money from investors to purchase many different investment types.
A stock is an insured bank account with high risk.
A stock is a lending investment to the government or a company.
A stock is a share of ownership in a company.
What type of market is described by a receding economy and a decline in the stock market?
Bear Market
Bull Market
Pig Market
Sheep Market
Duncan plans to invest all of his money in individual stocks. Why is this likely a bad investment strategy?
He will need a large amount of money to invest in individual stocks.
Purchasing individual stocks has a very low amount of risk and a low return.
Purchasing individual stocks has a high amount of risk and little diversification.
He will need to open multiple brokerage accounts for each stock he purchases.
Which statement best describes the risk level of bonds?
Bonds are one of the riskiest investment types, but have the potential for a high return.
Bonds have a low to moderate amount of risk and are less risky than stocks.
Bonds have a moderate amount of risk, but are a riskier investment when compared to stocks.
Bonds have no risk.
What is one way you can earn money by investing in bonds?
Through interest collected on your original investment.
Through dividends.
By selling your shares in the bond.
By purchasing a diversified bond type.
Dahlia is 24 years old. She makes $85,000 per year, has a fully funded Emergency Fund, and extra income each month. What should be her investor risk level?
Conservative
Moderate
Aggressive
Average
Which of the following is a characteristic of an index fund?
High fees
Insured
Diversified
Professionally managed
Mariam is young, willing to take a moderate amount of risk, but most importantly, wants an investment that is low-cost and diversified. Which is the best investment type for Mariam?
A bond
An individual stock
A savings account
An index fund
Which statement best describes how diversification impacts risk when you are investing?
Diversification means spreading your money across multiple investments, which decreases risk.
Diversification means spreading your money across multiple investments, which increases risk.
Diversification means putting all of your money into one investment, which decreases risk.
Diversification means putting all of your money into one investment, which increases risk.
Based on the image, what is the current trading price of McDonald's stock?
$188.50
$186.75
$24.43
$1.75
