Which of the following correctly orders the investments from LOWER risk to HIGHER risk? |
Diversified mutual fund − Treasury bond − Stock |
Why might a town decide to issue bonds? |
Both A and B |
What is the primary reason to issue stock? |
To raise money to grow the company |
What are dividends? |
A distribution of a small percentage of profits to shareholders. |
Diversification is important in investing because… |
It helps you to balance your risk across different types of investments. |
When might be the best time to start saving for retirement? |
At the earliest possible date. |
Which best describes the difference between stocks and bonds? |
Stocks allow investors to own a portion of the company; bonds are loans to the company. |
When you buy a ____ , you are loaning money to an organization. |
Bond |
Which of the following would be considered the highest risk portfolio? |
A portfolio made up of 60% stocks, 30% mutual funds, and 10% Treasury bonds. |
When it comes to investing, what is the typical relationship between risk and return? |
The greater the potential risk, the greater the potential return. |
If an employer does not offer a retirement plan, what might be another way to save for retirement? |
Both A and B |
What happens when a bond becomes due? |
The issuer will pay you back, plus interest. |
Why is a high-quality bond typically considered a lower-risk investment than a stock? |
A bond typically pays a fixed, predictable amount of interest each year. |
Which of the following is generally true about 401(k) and 403(b) retirement plans? |
All of the above |
EverFi – Week 9 – -Investing-
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