Your risk tolerance for investing should be determined by these two factors:

a. Your time horizon and when you will need access to the money

When it comes to buying stock in a company like Nike or Netflix...

much more risky to invest in individual stocks, compared to an index fund

Which of the following investment choices best reflects a diversified portfolio?

a. Investing in an S&P500 index fund

You invest $1,000 in a 5 year U.S. Treasury bond with a coupon rate of 5%. How much would you receive annually from this

$50 each year for the first four years and then $1,050 in the fifth year

How does investing in the stock market differ from putting money in a savings account at a bank?

a. If you need to access your money in a few months, savings is better

You have invested $50 in a stock. Which answer(s) below describes the way(s) you can profit from your investment?

dividends AND selling the stock at a higher price than you paid for it

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Investing - NGPF

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Questions 14

Answers

1
What is the most money that an investor could lose if they buy 40 shares of ElectricCarCo for $25/share?
Loss of $1,500
Loss of more than $2,000
Loss of $25
Loss of $1,000
2
You deposit $1,000 into a 5 yr CD earning 1% per year that compounds interest annually. After 5 years balance will be...
More than $1,050
About $1,000
More than $1,010 but less than $1,030
More than 1,000 but less than 1,010
3
Your risk tolerance for investing should be determined by these two factors:
Your education level and ethnicity
a. Your time horizon and when you will need access to the money
Your debits and credits
Your stocks and bonds
4
Imagine your savings acct interest is 1% a year, inflation is 2% a year. After one year, would the $ in the account buy
less than it does today
exactly the same as today
more than it does today
5
When it comes to buying stock in a company like Nike or Netflix...
You should sell the stock a soon as possible so that you can make a profit
much more risky to invest in individual stocks, compared to an index fund
It is generally easy for most investors to predict the direction of future
listen to experts on TV stations such as CNBC since they are generally righ
6
Which of the following investment choices best reflects a diversified portfolio?
Investing in a mutual fund that invests in 30-40 oil and gas companies
Investing in 10-20 companies in the technology industry
a. Investing in an S&P500 index fund
Investing in one large-cap restaurant stock
7
Which of these bond terms is most similar to the stock market concept of interest rate?
speculating
default risk
par value
a. coupon
8
What type of bond might your school district issue in order to build a new performing arts theater?
U.S. Treasury Bond
Corporate Bond
Municipal Bond
IPO Bond
9
You invest $1,000 in a 5 year U.S. Treasury bond with a coupon rate of 5%. How much would you receive annually from this
$50 each year for the first four years and then $1,050 in the fifth year
$1,000 each year for the five year term
$50 each year for the five year term
$1,000 in the first year and then $50 each year thereafter
10
You buy 10 shares of stock in ABC co. for $45 per share. Two months later you sold the 10 shares of stock for $80 per sh
Loss of $450
Loss of $800
Gain of $350
Gain of $800
11
Which investment vehicle represents an ownership interest in a company?
Savings Account
Stock
Corporate Bond
U.S. Treasury Bond
12
How does investing in the stock market differ from putting money in a savings account at a bank?
Investing is less risky
You cannot lose money when investing but you can lose money when saving
Historically, savings accounts have enjoyed higher returns than investing
a. If you need to access your money in a few months, savings is better
13
Justin wants : vacation for 1 month. He doesn’t have money. He's thinking of investing all $700 saved. Why shouldn't h
All of the above.
Investing in one company’s stock is quite risky.
Investing your whole savings in the stock market is a bad financial move.
One year probably isn’t enough time for one stock to turn $700 into a month
14
You have invested $50 in a stock. Which answer(s) below describes the way(s) you can profit from your investment?
Interest Income
Selling the stock at a higher price than you paid for it
dividends
dividends AND selling the stock at a higher price than you paid for it

Investing - NGPF Flashcards | StudBud