ScienceEconomicsInvesting example #8926
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Investing

Virginius Martin avatar Virginius Martin
13 October 2022
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21 test answers

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commodity
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an economic good or material, such as those produced in agriculture or mining
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diversification
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the practice of putting money into more than one kind of investment at a time
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liquidity
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the ability to quickly convert to cash
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retirement
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the period of time after people end their working careers
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return
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the money earned on an investment in a certain time period
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risk
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the chance or possibility of loss
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What does the information demonstrate about Alex's investments?
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He most likely would have benefited by diversifying.
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Which investment is best for someone who is likely to need cash soon?
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savings account
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What is the definition of risk?
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possibility of losing money on an investment
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What is the definition of liquidity?
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how easily an investment can be exchanged for cash
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In what way does a 401(k) differ from an individual retirement account (IRA)?
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A 401(k) is created through an individual's employer.
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How is a savings account most useful?
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for using money in the near future but not right away
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Someone who diversifies investments is more likely to
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offset their losses with gains.
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What is the relationship between risk and return?
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A higher risk often means a higher return.
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What might convince an investor to buy stock or mutual funds?
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news that a company is about to release a promising product
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How is a savings account most useful?
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for using money in the near future but not right away
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Which investment is best for someone who is likely to need cash soon?
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savings account
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Long-term investments are most commonly used to save money for _________
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retirement
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What does the information demonstrate about Gale's investments?
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If she had purchased only the stock and had not diversified her investments, she would have lost money.
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Which investment has the least liquidity?
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corporation
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Why is it risky to invest in a commodity?
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The commodity's price might drop significantly very quickly.