Investment Basics Scavenger Hunt
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Questions and Answers

What does the term 'invest' mean?

  • To buy a specific type of stock
  • To put money into something with the expectation of earning a profit (correct)
  • To spend money on a specific item
  • To lend money to a friend
  • What are the main types of investments?

  • Pensions, IRAs, and 401k
  • Stocks, bonds, and mutual funds
  • Stocks, bonds, cash equivalents, and real assets (correct)
  • Cash equivalents, real assets, and pensions
  • What is a bond?

  • A type of investment that represents a loan (correct)
  • A type of pension plan for retirement
  • A type of cash equivalent that earns high interest
  • A type of stock that gives ownership
  • What is a rate of return?

    <p>The amount of money earned as interest</p> Signup and view all the answers

    What is an opportunity cost?

    <p>The value of the next best alternative that is given up</p> Signup and view all the answers

    What is the purpose of a savings account?

    <p>To build up an emergency fund</p> Signup and view all the answers

    What is the main advantage of a Certificate of Deposit (COD) over a savings account?

    <p>The higher interest rate offered</p> Signup and view all the answers

    Why is an Index Fund a good option for long-term investments?

    <p>Because it diversifies risk across the entire stock market</p> Signup and view all the answers

    What happens to the value of your shares when the company performs well?

    <p>It increases</p> Signup and view all the answers

    What is the main benefit of Government Bonds in a portfolio?

    <p>They reduce risk by being a stable investment</p> Signup and view all the answers

    What happens if you withdraw your money from a COD before the term is up?

    <p>You are charged a penalty</p> Signup and view all the answers

    What is the goal of buying and selling individual stocks?

    <p>To buy low and sell high to make a profit</p> Signup and view all the answers

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