Basics of Investing

When you buy stock, you are actually buying a piece of the company and becoming part owner

• True

• False

Federal Government Bonds are essentially considered risk-free

• True

• False

You may withdraw your money from a CD before all of the time has passed

• True

• False

Getting a "return" on an investment is always a good thing

• True

• False

Investing presents a great risk because a strong return is not always guaranteed

• True

• False

When it comes to buying stocks, the goal is to...

• Be patient! Wait for a stock price to double before you invest

• Diversify! Buy a lot of high risk stocks

• Do your research! Follow all of the advice of the professionals

• Buy low! Hold the stock for a time, then sell it for more than you paid

A ____ pools money from many investors for the purpose of investing in stocks, bonds, and other investments

• Stock Market

• Mutual Fund

• Federal Government Bod

• Certificate of Deposit (CD)

No matter what anyone tells you… there is no way of knowing with absolute certainty whether buying stock in a company will result in a positive return or a negative return

• True

• False

Real Estate is an investment because you can... (select all that apply)

• Buy land and sell it for more than you paid

• Shorten maturity date and increase interest on income tax

• Buy a house and sell if for more than you paid

• Buy an apartment and rent the space to someone else

• Apply for a mortgage and pay an IOU with bonds

With a CD, the _____ promises to pay you a fixed amount of interest for a fixed amount of money during a fixed amount of time

• Federal Government

• bank

• corporation

• mutual fund