Investing Answers
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When investors purchase a commodity, they believe
A
the commodity's price will go up after purchase.B
the bank will pay interest to the investors.C
the investors' employer will match the cost.D
the commodity is guaranteed to make them money.2
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Which of these investments may be long term? Choose four answers.
A
savings accountsB
mutual fundsC
bondsD
retirement fundsE
commodities3
Which statement best describes stocks?
A
They should be purchased when prices are high and sold when prices are low.B
They are an investment in a company’s progress and profits.C
They are a type of investment that includes raw materials and natural resources.D
They should be purchased only as long-term investments.4
Which statements apply to a certificate of deposit (CD)? Choose two answers.
A
It is always purchased as a short-term investment.B
It can be purchased from a banking institution.C
It is always purchased as a long-term investment.D
It can be purchased for almost any amount.E
It is purchased through an individual's employer.5
What is the relationship between risk and return?
A
A higher risk often means a higher return.B
A lower risk always means a higher return.C
A higher risk often means a lower return.D
A lower risk will always mean a lower return.6
Someone who diversifies investments is more likely to
A
increase both risks and returns.B
offset their losses with gains.C
reduce both risks and returns.D
increase liquidity of investments.7
Why is it risky to invest in a commodity?
A
A commodity has little or no value as a long-term investment.B
Commodity stocks cannot be traded after you purchase them.C
The commodity's price might drop significantly very quickly.D
The investment will tie up your money for more than one year.8
How is a savings account most useful?
A
for saving for a long time without withdrawingB
for depositing and withdrawing money frequentlyC
for using money for CDs and other investmentsD
for using money in the near future but not right away9
The image shows Alex’s investments in one year. Investments during One Year
A
He should have invested in a commodity instead of a stock.B
He would have lost more with a higher-risk investment.C
He most likely would have benefited by diversifying.D
He most likely would have profited by buying more of the stock.10
In what way does a 401(k) differ from an individual retirement account (IRA)?
A
A 401(k) is created through an individual’s employer.B
A 401(k) can be created by individuals who deposit money.C
A 401(k) allows consumers to contribute before taxes.D
A 401(k) is a good long-term investment strategy.Did you find these answers helpful?
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