Michael is 25 yrs. old, has low financial health, a long time horizon & a high risk tolerance. Which allocation is best?

85% stocks and 15% bonds/cash equivalents

Which of the following statements about stocks is FALSE?

Stocks pay out interest annually.

When would it be a good idea to invest your money instead of putting it in a savings account?

When you won't need the money for a long time.

Which of the following statements about bonds is TRUE?

When a bond matures, you get the full amount you loaned back with interest.

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EVERFI: Lesson #4 - Keys to Investing (Marketplaces)

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EVERFI: Lesson #4 - Keys to Investing Marketplaces

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Questions 12

Answers

1
A _____ is a fixed income investment that represents a loan from an investor to a borrower.
Cash Equivalent
Stock
Bond
Mutual Fund
2
How comfortable you feel taking the risk of losing your money refers to:
Asset Allocation
Personal Financial Health
Time Horizon
Risk Tolerance
3
Michael is 25 yrs. old, has low financial health, a long time horizon & a high risk tolerance. Which allocation is best?
85% stocks and 15% bonds/cash equivalents
60% stocks and 40% bonds/cash equivalents
20% stocks and 80%/cash equivalents
40% stocks and 60% bonds/cash equivalents
4
You can diversify your portfolio by investing all your money in one industry.
True
False
5
Which of the following statements about stocks is FALSE?
When you buy stocks, you get a say in shareholder meetings.
Stocks represent a share of ownership in a company.
Stocks are considered relatively risky compared to bonds
Stocks pay out interest annually.
6
_____ is an investment strategy that mixes a wide variety of investments from different categories within a portfolio.
Diversification
Risk Tolerance
Technical Analysis
Asset Allocation
7
Why might an investor want to invest in the stock market?
The stock market usually offers a higher return a savings account
Investing in the stock market is a guaranteed way to make money.
Investing in stock market companies, owners can share profits of companies.
Both BLUE & YELLOW!
8
A well - diversified portfolio needs about 20-25 stocks from different categories.
True
False
9
When would it be a good idea to invest your money instead of putting it in a savings account?
When maintaining the value of your money with a little bit of growth.
When you won't need the money for a long time.
None of the ABOVE.
When you want to put your money somewhere safe.
10
Which of the following statements about bonds is TRUE?
A bond represents a share of ownership in a company.
Bonds are considered relatively risky compared to stocks.
Bonds pay out annual dividends.
When a bond matures, you get the full amount you loaned back with interest.
11
In the past 90 years, the stock market has had positive returns, averaging 10% annually.
True
False
12
Historically, long-term returns of the stock market have been negative.
False
True

EVERFI: Lesson #4 - Keys to Investing (Marketplaces) Flashcards | StudBud