Investing Answers
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How is a savings account most useful?
A
for saving for a long time without withdrawingB
for depositing and withdrawing money frequentlyC
for using money for CDs and other investmentsD
for using money in the near future but not right away2
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The image shows Alex’s investments in one year. Investments during One Year
A
He should have invested in a commodity instead of a stock.B
He would have lost more with a higher-risk investment.C
He most likely would have benefited by diversifying.D
He most likely would have profited by buying more of the stock.3
Which of these investments may be long term? Choose four answers.
A
savings accountsB
mutual fundsC
bondsD
retirement fundsE
commodities4
What is the relationship between risk and return?
A
A higher risk often means a higher return.B
A lower risk always means a higher return.C
A higher risk often means a lower return.D
A lower risk will always mean a lower return.5
What might convince an investor to buy stock or mutual funds?
A
belief that a company has just reached its peak popularityB
news that a stock's price has recently increased significantlyC
belief that a small number of investors have bought the stock so farD
news that a company is about to release a promising product6
Which investment is best for someone who is likely to need cash soon?
A
mutual fundB
CDC
401(k)D
savings account7
What is the definition of risk?
A
putting money into more than one investmentB
amount made in profit on an investmentC
using borrowed funds for an investmentD
possibility of losing money on an investment8
Why is it risky to invest in a commodity?
A
A commodity has little or no value as a long-term investment.B
Commodity stocks cannot be traded after you purchase them.C
The commodity's price might drop significantly very quickly.D
The investment will tie up your money for more than one year.9
The image shows Gale's investments during one year. Investments during One Year
A
If she had purchased only the stock and had not diversified her investments, she would have lost money.B
If she had diversified her investments further, her profits would have been considerably larger.C
If she had put money in her savings account only and had not diversified, her profits would grow.D
If she had diversified her investments further, she would have reduced her risk but made less of a profit.10
What is the definition of liquidity?
A
how difficult it is to maximize returns on investmentsB
how much money someone has in a savings accountC
how easily an investment can be exchanged for cashD
how much income someone has to invest each yearDid you find these answers helpful?
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