WorksheetsML FBLA Financial Literacy - Investing
Total questions: 20
Worksheet time: 10mins
What is investing?
Saving money for short-term goals
Putting money into assets with the goal of making a profit
Spending money on goods and services
Lending money to a friend
What is a stock?
A type of savings account
A share of ownership in a company
A government bond
A loan made to a company
What is a bond?
A share of ownership in a company
A debt investment where you lend money to a company or government
A type of savings account
A stock that pays dividends
What is a dividend?
The price at which a stock is bought or sold
A payment made by a company to shareholders from its profits
A tax on stocks
A fee paid to buy bonds
What is a mutual fund?
A company that lends money to the government
A pool of money from many investors used to buy stocks, bonds, or other securities
A type of investment that always loses money
A savings account with a high interest rate
What does it mean to diversify your investments?
Invest all your money in one stock
Spread your investments across different types of assets to reduce risk
Only invest in bonds
Invest in a single company for a high return
What is a risk in investing?
The chance to earn a guaranteed return
The possibility of losing money or not earning as much as expected
A reward for investing
A free bonus from the bank
What is the stock market?
A place where only bonds are traded
A government organization that controls money
A place where stocks and other investments are bought and sold
A place where only savings accounts are offered
What is a broker?
A person or firm who buys and sells investments on behalf of clients
A person who manages a company’s stock
A company that guarantees your investments will grow
A government agency that manages taxes
What is the purpose of a 401(k) plan?
To save for short-term expenses
To help you save for retirement with tax advantages
To purchase bonds directly from the government
To fund a college education
What is compound interest?
Interest earned only on the initial amount of money invested
Interest earned on both the original investment and the interest previously earned
A type of dividend payment
A tax charged on profits from investments
What does it mean when an investment has high volatility?
The investment will always increase in value
The investment’s value changes quickly and frequently
The investment is guaranteed to provide a fixed return
The investment pays steady dividends
What is the difference between a stock and a bond?
Stocks represent ownership in a company; bonds represent debt owed by a company or government
Bonds represent ownership in a company; stocks represent a loan to a company
Stocks are safer than bonds
Bonds pay higher dividends than stocks
What is the term for buying stocks when their prices are low and selling when their prices are high?
Diversification
Dollar-cost averaging
Buy low, sell high
Risk management
What is a real estate investment?
Purchasing a car to sell for a profit
Buying property like land or buildings to make a profit
Investing in bonds issued by the government
A type of savings account with no risk
What is an exchange-traded fund (ETF)?
A type of stock that cannot be traded
A mutual fund that trades on the stock exchange, similar to a stock
A government bond that cannot be sold
A savings account that earns high interest
What is the role of the Securities and Exchange Commission (SEC)?
To manage the money in personal bank accounts
To protect investors and regulate the stock market
To create new stocks and bonds
To give financial advice to companies
What is an example of a long-term investment?
Buying a new video game
Buying stocks or bonds for retirement savings
Spending money on groceries
Renting a car for a vacation
What is market timing in investing?
Predicting the best times to buy and sell investments based on market trends
The amount of time you hold an investment
A strategy for managing investment risk
A guaranteed way to make a profit
What is the goal of investing?
To make money by taking on as much risk as possible
To grow wealth over time by making smart investment choices
To earn a steady paycheck
To save money without any risk
