If an employer does not offer a retirement plan, what might be another way to save for retirement?
D Both A and B
What is the primary reason to issue stock?
B to raise money for the company
Which of the following would be considered the highest risk portfolio?
C A portfolio made up of 60% stocks, 30% mutual funds, and 10% Treasury bonds.
Why is a high-quality bond typically considered a lower-risk investment than a stock?
C A bond typically pays a fixed, predictable amount of interest each year.
How can investors receive compounding returns?
B By investing their earnings back into their original investment
Which investment type typically carries the least risk?
C Savings Accounts
Diversification is important in investing because…
A It helps you to balance your risk across different types of investments
Generally speaking, the _______ the risk, the _______ the potential return or loss.
B higher; higher
Which of the following correctly orders the investments from LOWER risk to HIGHER risk?
B Treasury bond ? Diversified mutual fund – Stock
Which best describes the difference between stocks and bonds?
B Stocks allow investors to own a portion of the company; bonds are loans to the company.
When might be the best time to start saving for retirement?
C At the earliest possible date.
Which of the following is generally true about 401(k) and 403(b) retirement plans?
D All of the above
Why might a town decide to issue bonds?
B To build new roads or bridges.
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