Answers2026-2027 Personal Finance w Mrs. RoudybushBanking: How to Manage Your Money

Investing and Financial Markets Answers

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1
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What can be traded in a commodities market?

A
stock
B
bonds
C
oil
D
debt
2
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Are the buying and selling of stocks centralized activities? Why or why not?

A
Yes, the New York Stock Exchange is the primary exchange for all the world’s most important trades.
B
No, people can buy stocks anywhere, and they do not need to go through a market.
C
Yes, the world’s stock markets are coordinated exchanges, and they are dependent on one another.
D
No, there are many stock markets around the world, and they are independent of one another.
3

Which term refers to the possibility of an investor losing some or all of an investment?

r
risk
l
likelihood
p
probability
c
chance
4

Which is true about investments and risk?

A
Low-risk investments have a high return over the long run.
B
High-risk investments usually fail.
C
Safe investments are always somewhat profitable.
D
Every investment carries some degree of risk.
5

If a company pays dividends on a stock, does that mean that the stock has appreciated in value? Why or why not?

Y
Yes, the payment of dividends indicates that a stock’s value has increased.
N
No, the payment of dividends indicates that a company has earned profits.
Y
Yes, the payment of dividends indicates that a company’s assets have grown.
N
No, the payment of dividends indicates that a company can repay investors.
6

best

T
They both use taxes to support a country’s growth.
T
They both invest money to earn a profit.
T
They both receive capital to use for growth.
T
They both act as angel investors for start-ups.
7

Which statement best describes how an investor makes money off debt?

A
An investor makes money by issuing bonds.
A
An investor makes money by earning interest.
A
An investor makes money by raising capital.
A
An investor makes money by being repaid for the principal.
8

Which best describes what generally occurs in financial markets?

A
Debt and loans are traded.
B
Assets are traded.
C
Commodities are traded.
D
Shares are traded.
9

How do bonds generate income for investors?

A
Bonds depreciate in value.
B
Bonds protect investors from bankruptcy.
C
Bonds pay interest to the bank that sold the bond.
D
Bonds pay a specified amount to the investor at maturity.
10

Which factors can affect a stock’s price? Check all that apply.

A
market performance
B
the company’s financial health
C
the quantity products produced
D
location of the company
E
the economy

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