QuizMe

1: Why do people invest their money?

To spend it all immediately

To earn a steady paycheck

To potentially grow their wealth over time

To avoid paying taxes

2: What are common types of investments?

Savings Account

Credit Cards

Stocks and Bonds

None of the above

3: What’s a benefit of ownership in an investment?

Guaranteed high returns

No need to monitor your investment

Potential for capital appreciation and dividends

Freedom from financial markets

4: What’s a risk of ownership in an investment?

Complete immunity from market fluctuations

Potential loss of money if the investment performs poorly

Guaranteed fixed returns

Exemption from taxes

5: What is compounding interest?

Interest earned from working a second job

Interest calculated only once at the end of the investment period

Earning interest only on the initial investment

Earning interest on both the initial investment and accumulated interest over time

6: How does compounding interest affect investments?

It slows down the growth of investments

It accelerates the growth of investments over time

It only applies to short-term investments

It has no effect on investment growth

7: What’s an example of a long-term investment goal?

Saving for a vacation next year

Building an emergency fund

Buying a car in 6 months

Saving for retirement in 30 years

8: What’s the main difference between stocks and bonds?

Stocks represent ownership in a company, while bonds are loans to a company or government

Stocks are risk-free, while bonds carry high risk

Stocks guarantee fixed returns, while bonds have potential for unlimited returns

Stocks only pay out dividends, while bonds only appreciate in value

9: If you invest $1,000 at an annual interest rate of 5% compounded annually, how much will you have after 1 year?

$1,250

$1,000

$1,100

$1,050

10: How does increasing the investment time horizon affect compound interest?

Compound interest decreases with a longer investment time

It has no effect on compound interest

Compound interest increases with a longer investment time

Compound interest only works for short-term investments