Ramsey CH 12 section 1 only

What is investing defined as in the key terms?

• The process of setting money aside to decrease wealth over time for short-term financial goals

• The process of setting money aside to increase wealth over time for long-term financial goals, such as retirement

• The process of spending money to gain immediate satisfaction

• The process of borrowing money to cover short-term needs

What does ROI stand for?

• Return on Investment

• Risk of Insolvency

• Rate of Interest

• Return on Internet

What does the Risk-Return Ratio represent?

• The relationship of expected risk compared to the expected return

• The relationship of expected return compared to the amount of risk taken with a given investment

• The ratio of risk taken in personal life compared to financial investments

• The ratio of return on investment to the total assets owned

What is a Liquid Asset?

• An asset that is difficult to sell or convert into cash

• An asset that can be easily bought or sold

• An asset that is associated with water or other liquids

• An asset that has a fixed value over time

According to the "WORDS OF WISDOM" section, what is the benefit of having a real plan and working on it early for retirement?

• You can avoid thinking about retirement altogether

• You set your life up for retirement

• You can rely on others for your retirement plan

• You can retire at an old age

What is the Fifth Foundation according to the text?

• Save money and invest in stocks.

• Build wealth and give.

• Start early and work hard.

• Learn about risk and return.

What does investing aim to achieve over time?

• Immediate high returns.

• A positive return on investment (ROI) through compound growth.

• A fixed income regardless of the time invested.

• Elimination of all investment risks.

Why did Jack end up with a ton of money for retirement?

• Because he won the lottery.

• Because he invested early and earned a solid return with acceptable risk.

• Because he saved money under his mattress.

• Because he inherited a fortune.

What is the relationship between liquidity and return, as mentioned in the text?

• The more liquid an asset, the higher the return.

• The more liquid an asset, the more risk it involves.

• The more liquid an asset, the less return it usually offers.

• Liquidity and return are not related.

According to the text, what percentage of non-retired Americans have no money saved for retirement?

• 25%

• 49%

• 35%

• 60%