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Which of the following is generally true about 401(k) and 403(b) retirement plans? |
All of the Above |
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What are dividends? |
A distribution of a percentage of a company’s profit paid to stockholders. |
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Which of the following correctly orders the investments from LOWER risk to HIGHER risk? |
Treasury bond − Diversified mutual fund – Stock |
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When it comes to investing, what is the typical relationship between risk and return? |
The greater the potential risk, the greater the potential return. |
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Why might a town decide to issue bonds? |
To build new roads or bridges |
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What is the primary reason to issue stock? |
To raise money to grow the company |
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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. |
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When you buy a ____ , you are loaning money to an organization. |
Bond |
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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. |
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How can investors receive compounding returns? |
By investing their earnings back into their original investment |
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Generally speaking, the _______ the risk, the _______ the potential return or loss. |
higher; higher |
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