Investing Answers

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1
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more than one year less than one year

A
more than one year
B
less than one year
2
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immediate expensesretirement

A
immediate expenses
B
retirement
3

401(k) IRA

A
401(k)
B
IRA
4

What rule is important to remember when evaluating risk and return?

A
The higher the risk, the higher the potential return.
B
The higher the risk, the lower the potential return.
C
The lower the risk, the higher the potential return.
D
There is no connection between risk and return.
5

What rule is important to remember when evaluating risk and return?

A
The higher the risk, the higher the potential return.
B
The higher the risk, the lower the potential return.
C
The lower the risk, the higher the potential return.
D
There is no connection between risk and return.
6

Use what you have learned about risk and return to complete these sentences.

Answers:
To minimize risk, investors should .:diversify their investments
Interest that builds on the principle and the interest already gained is .:compound interest
Money invested in a CD than money used to purchase a home.:has greater liquidity
7

Which investment option should Angela choose?

A
stocks
B
commodities
C
saving accounts
D
mutual funds
8

Use what you have learned about long-term investments to answer these questions.

Answers:
Long-term investments tie up money for.:more than one year
One reason why individuals focus on long-term investments is to save for.:retirement
A(n)allows both employees and employers to contribute to a retirement plan.:401(k)
9

X immediate expenses✔ retirement

A
X immediate expenses
B
✔ retirement
10

✔ 401(k)X IRA

A
✔ 401(k)
B
X IRA
11

Use what you have learned about long-term investments to answer these questions.

Answers:
Long-term investments tie up money for.:more than one year
One reason why individuals focus on long-term investments is to save for.:retirement
A(n)allows both employees and employers to contribute to a retirement plan.:401(k)

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Investing Answers — Personal Finance - EL3403