Investing-C * Unit Test

Front

What should Katrina do with her retirement savings given her salary of $65,000 and a 401(k) match for up to 3%? Options: Opt out of the 401(k) plan since she doesn’t have much to contribute; use the money elsewhere in her budget, Contribute $75/mo to her 401(k) and $75/mo to an IRA, so that she's diversified, Save the $150/mo in a bank account until she has enough to max out her 401(k), and then invest, Contribute the full $150/mo to the 401(k) because her company will match that full amount, "doubling" her investment every month.

Back

Contribute the full $150/mo to the 401(k) because her company will match that full amount, "doubling" her investment every month.

Front

What is one question an investor should ask when deciding whether or not they would like to open a Roth IRA or a Traditional IRA?

Back

Do I want to pay taxes now or later?

Front

What is Social Security?

Back

Social Security is a government program that pools contributions from current workers to fund retirement support benefits to those who are eligible.

Front

Why are Index Funds such a popular investing option?

Back

They provide a low-cost, diversified investment option that closely matches the overall return of a given index, such as the S&P 500.

Front

What was your profit or loss on StreamingVideoCo stock after buying 10 shares for $45 each and selling them for $80 each?

Back

Profit of $350

Front

Why is diversification a recommended investment strategy?

Back

Diversifying your portfolio helps reduce risk.

Front

How is a bond different from a stock?

Back

A bond is a loan you give to an organization while a stock is partial ownership in a company.

Front

How can someone make money from investing in a stock? Options: They sell the stock for a lower price than what they bought it for, They receive dividends or they sell the stock at a higher price than what they bought it for, The stock loses value but the overall market experiences a positive return, They sell the stock for the same price they bought it for

Back

They receive dividends or they sell the stock at a higher price than what they bought it for

Front

What is a brokerage account used for?

Back

It’s a type of account used to buy and sell stocks, bonds, and funds.

Front

How does investing in the stock market differ from putting money in a savings account at a bank?

Back

Investing allows you to accumulate wealth for retirement while saving is best for short-term purchases or emergencies.