Investing

Which investment is best for someone who is likely to need cash soon?

savings account

Which of these investments may be long term? Check all that apply.

mutual funds bonds retirement funds commodities

The image shows Alex’s investments in one year.

Investments during One Year

What does the information demonstrate about Alex’s investments?

He most likely would have benefited by diversifying.

Long-term investments are most commonly used to save money for

retirement.

Which investment has the least liquidity?

corporation

Why is it risky to invest in a commodity?

The commodity’s price might drop significantly very quickly.

What is the relationship between risk and return?

A higher risk often means a higher return.

Which are examples of high-risk investments? Check all that apply.

stock mutual fund

In what way does a 401(k) differ from an individual retirement account (IRA)?

A 401(k) is created through an individual’s employer.

Which statements apply to a certificate of deposit (CD)? Check all that apply.

It can be purchased from a banking institution. It can be purchased for almost any amount.

The image shows Gale’s investments during one year.

Investments during One Year

What does the information demonstrate about Gale’s investments?

If she had purchased only the stock and had not diversified her investments, she would have lost money.

When investors purchase a commodity, they believe

the commodity’s price will go up after purchase.

What is the definition of liquidity?

how easily an investment can be exchanged for cash

The pie graph shows sources of income for people ages 65 and over in 2010.

According to this chart, among people 65 and over, investment income represents the

fourth largest source of income.

How is a savings account most useful?

for using money in the near future but not right away