Unit 3 Investing Unit

A key difference between saving and investing is

• Saving is for everyone, investing is for the wealthy

• Your money is insured when investing, it is not in savings

• Investing has a guaranteed return, savings does not

• Saving is for emergencies & goals, investing is for long-term wealth

Why is compound interest more beneficial than simple interest?

• Your money grows faster when it is compounded

• Your taxed on simple interest, but not compound interest

• Fees for compound interest are greater than simple interest

• Compound interest is hard to calculate, so fewer use it

Which would be considered the highest risk investment type?

• Stock

• Mutual Fund

• Bond

• Money Market Account

The relationship between risk and return can be stated as

• Higher risk indicates higher return

• Higher risk indicates lower return

• Lower risk indicates higher return

• No relationship exists between risk and return

How is a bond fund different from an individual bond?

• A bond fund is a group of bonds and is considered more diversified

• A bond fund always gives you a higher interest rate than an individual bond

• A bond is issued by the government. A bond fund is issued by a company.

• A bond fund can't be sold but an individual bond can

This is the smallest country in the world

• The Vatican

• Romania

• Croatia

• Moldova

If Jonathan is earning 2% on an investment and inflation is increasing by 3%, what is happening to his purchasing power?

• It's increasing

• It's decreasing

• It's not changing

• Inflation and purchasing power are not related

How can you make money on stocks?

• Buy them when the price is high and sell when the price is low

• Interest

• Dividends

• Holding the stock at least 3 years

A _____ is a loan given to an organization while a _______ is partial ownership in the company.

• bond, ETF

• stock, bond

• bond, stock

• ETF, bond

The Great Pyramid is thought to be constructed of over ................. stone blocks

• 500,000

• 1,000,000

• 1,500,000

• 2,000,000