Investors expect to earn a lower return when they invest in a high risk asset

Investors expect to earn a higher return when they invest in a low risk asset

Investors expect to earn a higher return when they invest in a high risk asset

Investors expect to earn zero return when investing in a low risk asset

Identical to a mutual fund.

A specific fund of stocks or commodity actively managed by a professional.

More risky than a single stock.

A collection of various mutual funds managed by a professional.

Corporations

Local Government

Federal Government

All of the above

Investing is always a less risky option than saving.

Investing is best for short-term situations like emergency funds; saving is best for the long-term.

Investing typically earns between 1-2% while saving generally earns between 5-7%.

Investing allows you to accumulate wealth for retirement while saving is best for short-term purchases or emergencies.

Compound interest is difficult to calculate, so those who use it earn higher profits for their efforts.

Compound interest means you have a fund manager who is compounding your returns without charging a fee.

Compound interest allows you to earn interest not only on the amount you have saved, but also on the interest you've already accrued.

Compound interest directly impacts how much you will be charged in fees.

Investing in a diversified portfolio guarantees that you won’t lose money with your investments.

If you tell your fund manager to use diversification, they’ll charge you lower fees.

Diversifying your portfolio helps reduce risk.

If you diversify your portfolio, you will definitely earn a high return.

A bond is a loan you give to an organization/government while a stock is partial ownership in a company.

Bonds are typically riskier than stocks but have the potential to earn higher returns.

1. Bonds are usually issued by smaller startup companies while stocks are issued by well established organizations/governments.

Bonds are best for earning high returns while stocks are best for providing a stable source of income.

Put money into an IRA.

Estimate how much she will need for retirement to determine how much she needs to invest each month.

Opt-out of a company provided 401K.

Invest in a diversified portfolio.

Opt-out of the 401(k) plan since she doesn’t have much to contribute; use the money elsewhere in her budget.

Contribute $75/month to her 401(k) and $75/month to a savings account, so that she's diversified.

Save the $150/month in a bank account until she has enough to max out her 401(k), and then invest.

Contribute the full $150/month to the 401(k) because her company will match that full amount, "doubling" her investment every month.

Do I want to make a guaranteed return of 6% or 8%?

Do I want to pay taxes now or later?

Do I want to take advantage of my employer’s matching contribution?

Do I want to take on more or less risk?

Social Security is a type of retirement savings plan that you can open through a brokerage firm.

Social Security is a government program that pools contributions from current workers to fund retirement support benefits to those who are eligible.

1. Social Security is a type of retirement savings plan offered by some employers.

Social Security is a government mandate that requires employers to offer their employees a 401(k) or pension plan.

Staying calm when the market is experiencing a downturn.

Buying stocks when prices are low and selling them when they’re high.

Exiting the market because that’s what everyone else is doing.

Investing in a diversified portfolio instead of trying to beat the market.

Social Security

Savings Account

IRA

Pension

Cryptocurrency is managed by a bank.

The value of cryptocurrency is volatile.

Cryptocurrency is secured through cryptography.

Cryptocurrency cannot be refunded with the help of a bank.