Investing in Your Future - Key Terms

A Certificate of Deposit (CD) is:

• A type of bond

• A safe investment that earns a fixed interest rate for a specified length of time

• A savings account

• A type of stock

Bob is 22 years old and wants to start saving now for his retirement in 43 years. Of these choices, where should Bob put most of his money now for this long-term goal?

• a savings account at the bank

• mutual fund that invests in stocks

• the stock of one company

• a checking account at the bank

Full-Service Brokers provide:

• Only buying and selling services

• Clients with analysis and opinions based on their judgments, opinions of experts

• Only online trading services

• Only investment in stocks

What is the main characteristic of a bear market?

• Rising stock prices

• Falling stock prices

• Stable stock prices

• Increasing interest rates

A bull market is associated with ________.

• Economic decline

• Rising stock prices

• Stable stock prices

• Falling stock prices

Compound interest includes interest on:

• Only the principal

• Both the principal and accumulated interest

• Only the accumulated interest

• Only the annual interest.

Liquidity refers to the ability for an investment to be converted into what?

• Stocks

• Bonds

• Cash

• Real Estate

The maturity date is the day on which an investment must be renewed or cashed in, without what?

• Interest

• Penalty

• Tax

• Fee

Principal is the starting amount of money by whom?

• A bank

• An investor

• A company

• A government

Risk is the chance that what will happen to an investment value?

• It will increase

• It will decrease

• It will stay the same

• It will double