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Personal Finance
Module 4: InvestingReview
A type of income investment
DiversificationDollarCost AveragingRateof ReturnSavingsAccount
A type of income investment
SavingsAccount
A type of growth investment
StockStockExchangeTimeValue of MoneyWindfall
A type of growth investment
Stock
Spreading your money among different savings and investments
AssetCompoundingDiversificationDollarCost Averaging
Spreading your money among different savings and investments
Diversification
A system where the public can buy or sell stock shares
KrogerPlay it Again SportsStock MarketEbay
A system where the public can buy or sell stock shares
Stock Market
Something of value that can be changed into cash
AssetCompoundingDiversificationDollarCost Averaging
Something of value that can be changed into cash
Asset
The time value of money can best be explained using which one of the following concepts?
a. A dollar today is worth more than a dollar tomorrow.b. Take time to “pay yourself first.”c. Investments increase in risk over time.d. Compounding increases investments over time.
The time value of money can best be explained using which one of the following concepts?
a. A dollar today is worth more than a dollar tomorrow.
Konetahas money saved and invested several ways with a goal to grow her money at a rate higher than inflation. What is the historical long-term annual average rate of inflation?
a. 1%b. 3%c. 5%d. 7%
Konetahas money saved and invested several ways with a goal to grow her money at a rate higher than inflation. What is the historical long-term annual average rate of inflation?
b. 3%
Monica starts a mutual fund with $500 and adds $500 to her mutual fund every year for another nine years. Mason decides to wait 10 years so he can save up a lump sum of $5,000 to invest at one time in a mutual fund. If both Monica and Mason earn on average of 7 percent APY, who will have the larger mutual fund balance in 20 years?
a. Masonb.Monicac. They will have the same balance amount because they each invested the same amount at the same rate.d. There is not enough information presented to make a prediction.
Monica starts a mutual fund with $500 and adds $500 to her mutual fund every year for another nine years. Mason decides to wait 10 years so he can save up a lump sum of $5,000 to invest at one time in a mutual fund. If both Monica and Mason earn on average of 7 percent APY, who will have the larger mutual fund balance in 20 years?
b. Monica[Monica started investing early and has the advantage of compounded interest and reinvested earnings over the ten years before Mason starts to invest.]
Given the same principal amount and interest of 1.3 percent APY for all options below, which option will earn the most interest over three years?
a. certificate of deposit that has interest compounded dailyb. savings account that earns interest compounded quarterlyc. savings bond that has interest compounded twice a yeard. All of the above will earn the same amount of interest.
Given the same principal amount and interest of 1.3 percent APY for all options below, which option will earn the most interest over three years?
a. certificate of deposit that has interest compounded daily
The basic rule of a risk-to-return relationship is that …
a. the lower the risk, the higher the return rate.b. the higher the risk, the higher the return rate.c. the higher the risk, the lower the return rate.d. the two issues are not related.
The basic rule of a risk-to-return relationship is that …
b. the higher the risk, the higher the return rate.
Kyle isn’t willing to take much risk with his money as he sets money aside to use when he buys a car next year. Which one of the following types of investments potentially has the lowest investment risk while also growing in value?
a. collectiblesb. real estatec. savings accountd. stocks
Kyle isn’t willing to take much risk with his money as he sets money aside to use when he buys a car next year. Which one of the following types of investments potentially has the lowest investment risk while also growing in value?
c. savings account
Kendra just received a promotion with a nice raise. She has her spending plan under control, so she decides to adjust her long-range investing plan now that she can take on more investment risk. Which one of the following types of investments potentially has the highest risk and is most likely a higher rate of return for Kendra?
a. government bondsb. money market deposit accountc. savings bondsd. stocks
Kendra just received a promotion with a nice raise. She has her spending plan under control, so she decides to adjust her long-range investing plan now that she can take on more investment risk. Which one of the following types of investments potentially has the highest risk and is most likely a higher rate of return for Kendra?
d. stocks
Which one of the follow is not an example of investing?
a. buying a business to open an ice cream shopb. buying a car to get to workc. buying rental propertyd. buying a tow truck with a blade to start a towing and snow removal service
Which one of the follow is not an example of investing?
b. buying a car to get to work
If you buy Hershey stock, you share ownership in the company and you can vote on the types of chocolate that will be produced.
True or False
If you buy Hershey stock, you share ownership in the company and you can vote on the types of chocolate that will be produced.
False,you do share ownership however you do not have control.
Three steps to build wealth include 1) Have enough income to invest, 2) Make a plan, and 3) Put money to work by investing.
True or False
Three steps to build wealth include 1) Have enough income to invest, 2) Make a plan, and 3) Put money to work by investing.
True
Minors have to wait until they are adults before they can buy and stocks and bonds.
True or False
Minors have to wait until they are adults before they can buy and stocks and bonds.
False[Stocks and bonds can be purchased for minors through custodial accounts set up by parents or guardians.]
The best time to start investing is after working on a job full-time for at least five years.
True or False
The best time to start investing is after working on a job full-time for at least five years.
FalseThe best time is now
Most wealthy people have gained their fortunes by winning the lottery or inheriting a large sum of money.
True or False
Most wealthy people have gained their fortunes by winning the lottery or inheriting a large sum of money.
False
The term "bank teller" originated in the wake of the 1929 stock market crash, when banks began hiring low-paid workers to "tell" throngs of frantic depositors that their money was gone.
True or False
The term "bank teller" originated in the wake of the 1929 stock market crash, when banks began hiring low-paid workers to "tell" throngs of frantic depositors that their money was gone.
True
The trucking company Elvis Presley worked at as a young man was owned by Frank Sinatra.
True or False
The trucking company Elvis Presley worked at as a young man was owned by Frank Sinatra.
True

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Personal Finance - West Jefferson Local Schools Home