AnswersOK-Personal Financial Literacy S1 – EDGNTY-83861 26-27Investment Strategies

Insurance Answers

0 verified answers1 views
1
Free Preview

Which is a commodity someone might invest in?

A
a mutual fund
B
natural resources
C
government bonds
D
a certificate of deposit
2
Free Preview

diversifiedsunklostwasteful

A
diversified
B
sunk
C
lost
D
wasteful
3

How is a 401k different from an individual retirement account (IRA)?

A
A 401k is a good long-term investment strategy.
B
A 401k allows people to contribute before taxes.
C
A 401k is created by an individual who deposits money.
D
A 401k is created by an employer who may match contributions.
4

The graph shows examples of investments with high and low liquidity.

Question illustration
A
knows they will need cash in the near future.
B
knows they will need cash years from now.
C
wants to have a guaranteed source of income.
D
wants to have higher returns on their investment.
5

The graphic shows a sample 401k investment.

Question illustration
A
It encourages employees to contribute by offering an employer bonus.
B
It ensures that employees who contribute will retire with more money.
C
It guarantees employees a return on their investment because of a company match.
D
It incentivizes employees to contribute by offering an employer match.
6

Which investment has the least liquidity?

A
property
B
stocks
C
a savings account
D
a 401k
7

Ida is 25 years old and invests a one-time lump sum of $10,000 in her company's 401(k), which earns an average annual return of 6% compounded annually.Using the Rule of 72, about how many years will it take for Ida's investment to double?

A
2 years
B
6 years
C
10 years
D
12 years
8

Tina has $1,000 per year she can invest to save money for her future.Which option would allow the highest growth for Tina's investment?

A
Tina can start investing the whole amount this year at 5% interest.
B
Tina can start investing the whole amount this year at 7% interest.
C
Tina can start investing half of the amount two years from now at 5% interest.
D
Tina can start investing half of the amount two years from now at 7% interest.
9

Which investor is making a common error?

A
an employee of a popular hardware store who invests only in that company’s stock
B
an employee of a popular software company who invests in many similar companies
C
someone who sells the slumping stock while they are still able to make a profit based on what they paid
D
someone who buys stock in both domestic and more risky international companies
10

Which statements are true regarding a traditional individual retirement account? Choose three answers.Employers create them and match employee contributions. People can contribute to the account until retirement age. People can withdraw money penalty-free at any time.Contributions to the account are limited each year. Contributions reduce taxable income.

A
Employers create them and match employee contributions.
B
People can contribute to the account until retirement age.
C
People can withdraw money penalty-free at any time.
D
Contributions to the account are limited each year.
E
Contributions reduce taxable income.

Did you find these answers helpful?

More from this Course

Quiz
10 verified answers

Investment Strategies

Quiz
10 verified answers

Investment Strategies

Quiz
10 verified answers

Investment Strategies