Free Printable PF - Unit 5 Test: Intro to Investing

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PF - Unit 5 Test: Intro to Investing

Total questions: 16

Worksheet time: 19mins

Name

Class

Date

Compounding increases your investment’s growth by ___ your earnings to gain additional ___

(a) (b)

Choose from the below words

reinvesting

returns

doubling

rates

principal

Historically, the value of the stock market has gone (a) and (b) a lot, but overall has (c) over time.

Choose from the below words

down

increased

stayed the same

decreased

If you want to maximize your investment returns, which of these suggestions would be the BEST advice?

Make frequent trades and withdraw your short-term earnings

Start to invest early for the long-term

Reinvest earnings

Use diversification and allocation to minimize risk

How does a bond differ from a stock in your investment portfolio?

Bonds typically have higher returns and lower risk than stocks

Bonds typically have higher returns and higher risk than stocks

Bonds typically have lower returns and higher risk than stocks

Bonds typically have lower returns and lower risk than stocks

When it comes to investing in the stock market, which of the following statements is False?

There is little to no risk to investing in the stock market

It is easy to make money by timing the market to buy/sell stocks

The whole stock market value can go up even if some stock values go down

It is better to wait until retirement age to begin investing in the stock market

In 2018, Agatha set up a spreadsheet with a list of 10 stocks and 4 bond funds she’d just purchased for her investment portfolio. She recorded her purchase price per share and the number of shares she’d bought of each asset. She hasn’t bought or sold any shares since that day. She’s interested to know how much money she’d gain or lose if she sold all the shares today. What new data would she need in order to determine the return on investment for her entire portfolio?

The price per share for each of her investments today

The total returns of the US stock market over that same time frame

The number of shares other investors have purchased over that same time frame

The federal interest rate, minus inflation since the day she purchased the shares

What does it mean to have an investing portfolio that is diversified?

Using a variety of sources to do research on what stocks to buy

Making sure that your investments are different from those of your friends and family

Investing in different assets to spread out the risk to different markets

Never buying the same stock more than once

A dividend is ___

(a) - (b)

Choose from the below words

a payment a bank

a payment you

makes periodically to stakeholders

a payment a company

Which of the following is FALSE about investing?

It is meant for short-term needs like your emergency fund, not saving for retirement

It guarantees a high rate of return over a short period of time

It can help you grow your money through the power of compounding

It involves little risk because your returns are insured up to $250,000

10.

Trevor has saved $500 in a savings account that earns 1.5% interest annually. What will most likely happen to the purchasing power of his savings over time?

His purchasing power will DECREASE because the interest rate is lower than the historical rate of inflation

His purchasing power will INCREASE because the interest rate is higher than the historical rate of inflation

His purchasing power will INCREASE because the interest will compound faster than the historical rate of inflation

His purchasing power will remain the SAME because the interest rate is the same as the historical rate of inflation

11.

What is the growth factor of the function represented by this table? Note: y-values are rounded to two decimal places.

12.

What is the initial value of the function represented by this table? Note: y-values are rounded to two decimal places.

13.

Emile has $500 to deposit in an investment account that will double every decade. How much money will Emile have in 4 decades?

(a)

14.

You’ve set a goal of having $15,000 after 10 years. If you estimate that your investment account will have an average yearly growth of 12%, which equation could be used to calculate how much you should invest today?

$y=15000\left(1.12\right)^{10}$

$y=15000\left(0.12\right)^{10}$

$15000=x\left(1.12\right)^{10}$

$15000=x\left(0.12\right)_{10}$

15.

You work at a company as an accountant. You are calculating the value of the company’s assets after a 5% per year depreciation. If the initial value of the assets was $204,500 and it has been 4 years since they were purchased, what is the value of these assets today?

(a)

16.

You model your investment account using the formula $y=25000\left(1.025\right)^x$ where x represents the number of years and y represents the account balance after x years. What is the growth rate of your investment?

(a)

100 %

PF - Unit 5 Test: Intro to Investing

Total questions: 16

Worksheet time: 19mins

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