Which of the following best describes the difference between stocks and bonds?

Stocks represent ownership, bonds are loans to companies/governmen

What are mutual funds

mutual funds pool money to invest in many assets

Which of the following is true about bonds?

They pay back the investor over time with interest

Which of the following is a benefit of investing in mutual funds?

Professional management and diversification

What does it mean when a stock price goes up?

More investors want to buy the stock

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Duplicate of Financial Literacy (Basics of Investing)

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Basics of Investing

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Questions 10

Answers

1
Buying into a large group of stocks or bonds instead of in individual companies is called?
Individual retirement plans
Employer-sponsored plans
Individual Investments
Mutual Funds
2
Which of the following best describes the difference between stocks and bonds?
Stocks guarantee returns, bonds are only for government
Stocks are savings accounts, bonds are retirement plans
Stocks represent ownership, bonds are loans to companies/governmen
Stocks and bonds are both forms of debt
3
What do you own when you buy a stock?
A piece of the company
A guarantee of profit
A share of the company’s debt
A contract for future employment
4
Which of the following is NOT one of the investment option we learned about?
Mutual Funds
Cash
Stocks
Bonds
5
What are mutual funds
mutual funds are illegal for minors
mutual funds are personal savings accounts
mutual funds are insurance policies
mutual funds pool money to invest in many assets
6
Which investment is typically considered the least risky?
Cryptocurrency
Bonds
Mutual funds
Stocks
7
Which of the following is true about bonds?
They are only available to government employees
They pay back the investor over time with interest
They are ownership shares in a company
They never lose value
8
Which of the following is a benefit of investing in mutual funds?
You must buy them directly from a company’s CEO
You only invest in one stock
Guaranteed returns every year
Professional management and diversification
9
How can you make money through stocks?
By holding the stock forever
Capital Gains
Copying Tiktokers
Dividends
10
What does it mean when a stock price goes up?
The company has gone bankrupt
More investors want to buy the stock
The government increased interest rates
The bond market is crashing

Duplicate of Financial Literacy (Basics of Investing) Flashcards | StudBud