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How is a savings account most useful?

for saving for a long time without withdrawing

for depositing and withdrawing money frequently

for using money for CDs and other investments

for using money in the near future but not right away

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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.

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 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 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.

When investors purchase a commodity, they believe

the commodity's price will go up after purchase.

the bank will pay interest to the investors.

the investors' employer will match the cost.

the commodity is guaranteed to make them money.

Why is it risky to invest in a commodity?

A commodity has little or no value as a long-term investment.

Commodity stocks cannot be traded after you purchase them.

The commodity's price might drop significantly very quickly.

The investment will tie up your money for more than one year.

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.

Which is an example of a high-risk investment?

stock in a start-up company

bond

CDs from an insured bank

401(k)

Which investment is best for someone who is likely to need cash soon?

mutual fund

401(k)

savings account

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