finance

The relationship between risk and return can be stated as

Higher risk indicates higher return

Which would be considered the highest risk investment type?

stock

Index funds are a popular investing option because

they are low-cost, diversified options that closely match returns of S&P.

1 am only able to invest in the 401k options that my company offers.

true

which of the following statements is true about the state of retirement in the U.S. ?

you invest to build wealth and to support themselves in retirement

What's the difference between active and passive investing

- Active achieves higher returns - Passive pays lower fees and is traditionally ETFs

which is true about initial public offerings (3)?

- IPOs occur when a private company becomes publicly traded - when the IPO occurs , a company raises money to grow the business - the value of an IPO can be different to measure

Why is compound interest more beneficial than simple interest?

- Your money grows faster when it is compounded - You earn interest on your interest

What are the TWO ways you can make money on stocks?

- a capital gain - dividends

What is the 401 (K) plan?

A retirement plan for employees

as you get older , a target date fund will adjust by

Decreasing your stocks & increasing your bonds

A fund with shares that can be traded on the market throughout the day, like stocks.

Exchange Traded Fund (ETF)

Which type of retirement account is an investment option for ANY young person entering the full-time workforce?

IRA

A 401(k) offers all of the following EXCEPT:

Immediate access to your money in the account

What are mutual funds?

Investments that pools money from several investors

A diversified portfolio is desirable because

It decreases risk

How does a mutual fund differ from an index fund?

MFs are actively managed by a professional while IFs are not

Which is NOT a stock market index?

New York Stock Exchange

Which of the following is true about owning a share of stock?

Owning a share means you own a percentage of the company.

A Roth IRA and 401 K are:

Personal Retirement Plans

What does it mean to "diversify" your portfolio?

Spreading risk by investing money in a variety of funds /investment options

A fund that helps you take more risk when you're young and gets more conservative over time

Target Date Fund (TDF)

Why is it important to start investing as soon as possible?

You have more time for your money to compound

Which is NOT a good reason to buy a stock fund like the S&P 500?

You want to "beat the market" with your ROl

True/False: Investing in a diversified portfolio of stocks guarantees you will not lose money.

false

A fund that tries to match the returns of a specific market or market section.

index fund

Are Index funds passive or active?

passive

in retirement , it's common to rely on income from all of the following sources except ...

paycheck from employer

a key difference between saving and investing is

saving is energencies and goals , investing is a long term wealth