Bonds and Stocks Math
Bella is 68 years old and is new to investing. How should she split her investments
50% stocks 50% bonds
A share or part ownership in a company
Stock
This market is going up
bull
Is an index fund diversified?
Yes
What is the risk level of bonds?
Low to moderate
Seb is 26 and is making good money at his current job. He also it working a side hustle so he has a lot of extra money. How should he split his investment.
Which has the highest risk?
Stocks
This market is going down
bear
Is this diversification?
Holly plans on investing all of her money in one stock.
No
Henry is 25 years old is working full time and has a lot of extra income each month. What should his investment risk level be?
Aggressive
Olivia is 48 years old and some extra money to invest. She has invested before but is still somewhat new to investing. She plans on leaving the money alone for about 10 years. How should she split her investment
60% stocks 40% bonds
What is it called when you loan a company or government money and they pay you back later with interest.
Bond
As the demand for a stock increases, stock price ______
Rises
Does diversification increase or decrease risk?
Decrease
In order to be an aggressive investor you should be able to keep your money invested for at least ______ years
10
Billy is 33 years old and wants to start investing his extra money. He wont touch the money for many years and wants to make as much as possible. How should he split his investment
87% stocks 13% bonds
A group of stocks that are bundled together.
Index Fund
How can you earn money by investing in the stock market? (write both ways)
Receive dividends from the company or sell your share at a higher price than you bought it.
If you are too young to open an investment account, you can have your parents help you open a _____________ (write both accounts)
custodial IRA or custodial brokerage account
What is the term for making interest on the original amount you deposited plus any interest you have previously owned?
Compound interest
what is the formula to find the split for aggressive investors?
120 - age = stock %
100- stock = bonds %
This is the most risky investment type of the three: stocks, bonds, index funds?
stocks
Why is it important that there are both bull and bear markets
They balance each other
Why is diversification important?
If a certain investment doesn't do well, you have others that will help balance it out so you don't lose money.
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