What is liquidity?
What is simple interest?
Interest earned on the principal investment
When talking about the time value of money, this will result in your largest return.
Invest as long as possible and at the highest interest rate possible
What is a feature of a money market account?
It has tiered interest rates
Who would you contact if you want to make an investment?
A brokerage firm
This is NOT true in regards to investing in stock.
A stockholder will always receive profit when a stock is sold.
A bond is:
A type of debt that a company issues to investors for a specified period of time
If you need a savings tool that is very liquid and accessible, which one would you choose?
Checking Account
What is good about a diversified portfolio?
Decreases risk by investing money in a variety of investments
What is compound interest?
Earning interest on interest
What is a feature of a CD (certificate of deposit)?
Funds are held for a certain length of time
It is best to have the rate of return on an investment_______ than the rate of inflation.
Higher
What is the most common relationship between risk and return?
Higher risk=Higher return
What is liquidity?
How quickly and easily an asset can be converted into cash.
In addition to other options, how liquid is a savings account?
More liquid than a certificate of deposit
Which type of investment has tax benefits?
Tax-advantaged investments
This is a true statement in regards to paying taxes on investments.
Taxes are often owed on profits generated from investments
What is a tiered interest rate?
The amount of interest earned depends on the amount of money in the account
What statement best describes inflation?
The rise in general level of prices.
Which statement is true about mutual funds?
They are diversified investments
What is the security level of savings tools?
They are protected by the U.S. government
In order to save money, giving up your daily McDonald's soda is known as a(n)____________.
Trade-Off
What does it mean to "pay yourself first"?
You should set aside a predetermined amount of money to save before using any money for spending.
