Choose wisely. There is only one correct answer to each question.
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1.
Which of the following investments are the most volatile in their pricing?
Stocks. Stocks are the most volatile. Over the long term, stocks have a higher return than bonds or savings accounts. But this volatility means that over the short term, other types of investments may significantly outperform stocks.
2.
What is perhaps the main reason to invest in stocks as opposed to other investments?
They provide the highest potential returns. In fact, over the long term, no other type of investment performs better.
3.
When you buy a stock, you are _______.
Buying an ownership interest in a company. When you buy a stock, you are buying an ownership interest in a company. Bonds are loans from companies and the government.
4.
Buying shares of stock in a company gives you ownership in that company.
True. Stock is about ownership (also called equity) and all the benefits of that ownership.
5.
Which of the following investments provide the biggest long-term returns?
Stocks. Of the types of investments listed, stocks provide the biggest long-term returns. In attempting to reach your financial goals in life, maximizing the return on your investment dollars is key.
