Investing

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

If interest rates rise, what will typically happen to bond prices?

• Rise

• Fall

• Stay the same

• Interest Rates are not related to bond prices

What is the benefit of a target date fund (TDF)?

• TDFs come with lower fees

• TDFs adjust assets allocation automatically based on retirement year

• TDFs are insured against loss for the first 5 years

• TDFs guarantee a certain rate of return by the target date

What is Social Security?

• Social Security is a private retirement fund run by your company

• Social Security is another name for a 401(k)

• Social Security is a government run retirement program

• Social Security is a program that matches your 401(k) contributions

Andy bought 5 shares of a company for $10. Later, he sold all 5 shares for $15. What was his profit/loss on the stock?

• Profit of $5

• Loss of $5

• Profit of $25

• Loss of $25

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

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

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

Which would be considered the highest risk investment type?

• Stock

• Mutual Fund

• Bond

• Money Market Account

An account that is used to buy and sell stocks, bonds, and funds is called a

• Roth IRA

• ETC Account

• Brokerage Account

• Target Date Fund