Choose wisely. There is only one correct answer to each question.
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1.
If you buy a stock, it will definitely increase in value over time.
False. Though stocks on the whole have increased in value substantially over the decades, we should not say that a given stock will definitely increase in value over time. Some stocks simply don't.
2.
Over the long term, which investments provide the lowest real (inflation adjusted) returns?
Savings accounts. Savings accounts provide the lowest real (or inflation adjusted) returns over the long term.
3.
A good way to minimize the effects of bad timing in stock choices is to invest for the short term.
False. A good way to minimize such effects would be to invest for the long term instead, since volatility tends to iron itself out over time.
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.
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.
