Stock Market Investing for Teenagers

What is a custodial account?

• A retirement account for adults

• A savings account for adults

• A trust fund for minors

• A brokerage account for minors

What are the two ways to make money by buying and holding stocks?

• Market volatility and stock options

• Stock splits and bond yields

• Dividend income and capital appreciation

• Interest income and capital gains

What is compound interest?

• Interest on interest

• Interest on loans

• Interest on savings

• Interest on dividends

What is the recommended investing strategy for long-term investors?

• Day trading

• Value investing

• Passive investing

• Active investing

What is the main advantage of dollar cost averaging?

• Quick profits from trading

• Consistent investment over time

• Reduced tax rates

• Guaranteed high returns

What is the main disadvantage of trying to time the stock market?

• Lack of investment opportunities

• Inability to predict market movements

• High brokerage fees

• Limited access to financial advice

What is the purpose of dividend payments from companies to stockholders?

• To reduce corporate profits

• To attract new investors

• To reward stockholders

• To fund business operations

What type of account is required for investing in stocks if you are under 18?

• 401(k) account

• Custodial account

• Roth IRA

• Trust fund account

What is the recommended approach for teenagers who want to start investing?

• Investing in high-risk options

• Active investing in individual stocks

• Day trading in the stock market

• Passive investing in index funds

What is the main reason for encouraging teenagers to start investing at an early age?

• To take advantage of compound interest

• To maximize tax benefits

• To increase government aid opportunities

• To reduce financial aid eligibility