Level 1
Ana puts her money in the bank to keep it safe, what is this called?
Investment
maria buys stock but prices suddenly go down because of a crisis.What type of risk is this?
market risk
Ben buys bonds. Later, interest rates increase and his bonds lose value. What risk is this?
Interest rate risk
Mark invest in a U.S. company. The peso become stronger, reducing his profit. What risk is this?
Currency Risk
Why do investments with high risk usually offer higher returns?
Investors are rewarded for taking more risk
Carlo invest his money but is not sure if he will earn or lose.What is the uncertainty called?
Risk
john keeps his money under the bed for years.prices go up and his money buys less.what risk is this?
inflation risk
Lea wants to sell her land quickly but cannot find a buyer .What risk is this?
Liquidity Risk
Why is investing for a long time safer than short-term investing?
It reduces the effect of sudden market changes
If your investment earn 3% but inflation is 6%, are you gaining or losing money?
Losing money
True or False: You can lose noney if you invest.
True
Which investment is riskier: stocks or savings account?
Stocks
A company fails because of poor management, causing its tax price to fall. What risk is this?
Business Risk
Why are government bonds usually safer than company bonds?
They are backed by the government
Why is it risky to invest all your money in one company?
If the company fails, you lose all your money
Which is safer: saving money in the bank or buying stocks?
Saving money in the bank
Anna invests in different businesses so she will not lose everything. What is this called?
Diversification
Which can be sold faster: stocks or a house?
Stocks
How does diversification help reduce risk?
Loses in one investment can be balanced by gains in others
Which risk affects all investors during an economic crisis?
Market Risk
The money you gaun from investing is called what?
Return
Peter lends money to a company, but the company cannot pay him back. What risk is this?
Credit risk
Why is putting all your money in one investment risky?
You may lose everything if it fails
Why is real estate considered less liquid than stocks?
It takes longer to sell
Why should a student investor understand risk before investing?
To avoid losses and make better decisions