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WorksheetsInvesting 101
Total questions: 10
Worksheet time: 5mins
What does it mean to invest?
To spend all your money at once.
To keep your money under your mattress
To allocate money, time, or resources into a particular endeavor with the expectation of generating a positive return or profit
To donate all your money to charity
What is one potential benefit of investing in the stock market?
Guaranteed returns
Better potential returns compared to other forms of investment
No risk of losing money
Immediate wealth
How does investing help counter the effects of inflation?
By guaranteeing a fixed return
By reducing the cost of goods and services
By potentially growing your money faster than inflation is shrinking it
By increasing your income
What is appreciation in the context of investing?
A formal recognition of the value of an investment
An increase in the value of an asset over time
The interest earned on an investment
The dividends paid by a company
What are dividends?
Payments made by companies to their investors as a way to share their profits
A type of investment strategy
The cost of investing in a particular company
A tax imposed on investment income
What is simple interest in the context of investing?
Interest that is paid only on the initial amount (or principal) that was deposited
Interest that is paid on both the initial amount and on the interest previously added to the deposit
Interest that is paid on the profit made from an investment
Interest that is paid on the dividends of an investment
What is a Dividend Reinvestment Plan (DRIP)?
A plan where you invest only in dividend-paying stocks
A plan where dividends are reinvested to purchase more shares of the company
A plan where dividends are used to pay off your debt
A plan where dividends are donated to charity
Which type of investments act as loans and pay interest over time?
Stocks
Mutual funds
Treasury bills
Real estate
What is market risk?
The risk of losing all your investment
The risk that the market will close
The risk that comes from fluctuations in market prices
The risk of investing in the wrong market
What does it mean for an asset to "appreciate"?
The asset decreases in value over time
The asset remains the same price over time
The asset increases in value over time
The asset is sold for less than its purchase price
