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Which statement best describes stocks?

They should be purchased when prices are high and sold when prices are low.

They are an investment in a company’s progress and profits.

They are a type of investment that includes raw materials and natural resources.

They should be purchased only as long-term investments.

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What is the definition of liquidity?

how difficult it is to maximize returns on investments

how much money someone has in a savings account

how easily an investment can be exchanged for cash

how much income someone has to invest each year

What is the definition of risk?

putting money into more than one investment

amount made in profit on an investment

using borrowed funds for an investment

possibility of losing money on an investment

The image shows Alex’s investments in one year. Investments during One Year

He should have invested in a commodity instead of a stock.

He would have lost more with a higher-risk investment.

He most likely would have benefited by diversifying.

He most likely would have profited by buying more of the stock.

In what way does a 401(k) differ from an individual retirement account (IRA)?

A 401(k) is created through an individual’s employer.

A 401(k) can be created by individuals who deposit money.

A 401(k) allows consumers to contribute before taxes.

A 401(k) is a good long-term investment strategy.

Which of these investments may be long term? Choose four answers.savings accountsmutual fundsbondsretirement fundscommodities

savings accounts

mutual funds

bonds

retirement funds

commodities

Which investment has the least liquidity?

mutual fund

house

checking account

small business

What might convince an investor to buy stock or mutual funds?

belief that a company has just reached its peak popularity

news that a stock's price has recently increased significantly

belief that a small number of investors have bought the stock so far

news that a company is about to release a promising product

What is the relationship between risk and return?

A higher risk often means a higher return.

A lower risk always means a higher return.

A higher risk often means a lower return.

A lower risk will always mean a lower return.

Which statements apply to a certificate of deposit (CD)? Choose two answers. It is always purchased as a short-term investment.It can be purchased from a banking institution.It is always purchased as a long-term investment.It can be purchased for almost any amount.It is purchased through an individual's employer.

It is always purchased as a short-term investment.

It can be purchased from a banking institution.

It is always purchased as a long-term investment.

It can be purchased for almost any amount.

It is purchased through an individual's employer.

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