WorksheetsPhase 4 Student Competition Quiz
Total questions: 8
Worksheet time: 6mins
How does 'Inflation' impact your long-term savings and investments?
It reduces the cost of goods and risk
It increases the value of savings
It decreases the purchasing power of your money over time
It has no impact
What is the impact of 'Compound Interest' on long-term investments?
It decreases the value of your investments
It accelerates the growth of investments over time by earning interest on interest
It guarantees you get rich quick and reduced risk on your investments
The investment won't ever decrease in value
Why is it important to 'Diversify' your investments?
To concentrate risk in one area
To spread risk and reduce the impact of any single investment loss
To ignore market fluctuations
To maximise returns on one investment
Which is an example of 'Dollar-Cost-Averaging' your investment?
Investing $1000 every month, regardless of how the market is performing
Investing $1000 each time the investment decreases in value, to lower your investment average
Which investment will generate a greater return based on your understanding of 'The Power of Compounding Interest'?
Scenario A:
Investing $200 a month from age 19 to 29 ($24,000 invested in total) and withdrawing the investment at age 60
Scenario B
Investing $200 a month from age 29 to 59 ($72,000 invested in total) and withdrawing the investment at age 60
Scenario Question (Double Points!)
Emma won $10,000 and wants to invest the money but does not know how.
What would be her most sensible investment strategy?
Invest $5,000 a month into a diversified managed fund and invest $5,000 per month split between her favourite individual stocks.
Invest the $10,000 into a diversified managed fund or index fund
Invest in the best performing company in Australia over the past 12 months
Engage in speculative investments to chase high and fast returns
Scenario Question (Double Points!)
Lisa receives a bonus of $2,000. She has no emergency fund and wants to invest in the stock market.
What should she do first?
Start building an emergency fund and repay any debts
Invest the entire amount in stocks
Allocate the money to her 'Wants' bucket
Allocate the money to her 'Needs' bucket
Scenario Question (Double Points!)
You’re nearing retirement and have a significant portion of your savings in stocks.
If your priority is preserving your wealth, what should you do?
Keep all savings in stock investment funds
Diversify your retirement funds into more defensive assets to reduce risk
Withdraw all the money from your investments
Ignore market conditions
