Investment Starting Investment 2

Question 1

What is typically the first step before making any investment?

Accepted Answer

Building an emergency fund

Answer

Buying individual stocks

Answer

Day trading

Answer

Taking out a loan to invest

Question 2

Which account offers tax-advantaged retirement savings in the U.S.?

Accepted Answer

Roth IRA

Answer

Checking account

Answer

Money market savings

Answer

Certificate of deposit

Question 3

What does 'dollar-cost averaging' mean?

Accepted Answer

Investing fixed amounts at regular intervals

Answer

Investing a lump sum all at once

Answer

Only buying when prices drop

Answer

Converting dollars to other currencies

Question 4

Why is starting to invest early beneficial?

Accepted Answer

Compound growth has more time to work

Answer

Stocks are cheaper when you're young

Answer

Taxes are lower for young investors

Answer

Brokers charge less for beginners

Question 5

What is a low-cost way for beginners to diversify?

Accepted Answer

Investing in an index fund or ETF

Answer

Buying one company's stock

Answer

Putting all money in crypto

Answer

Holding only cash

Question 6

What is an employer 401(k) match?

Accepted Answer

Free money the employer contributes based on your savings

Answer

A penalty for early withdrawal

Answer

A type of stock option only

Answer

A government tax credit

Question 7

Before investing, why should you pay off high-interest debt first?

Accepted Answer

The guaranteed savings often exceed expected investment returns

Answer

Debt has no effect on investing

Answer

Investing is illegal with debt

Answer

Brokers require zero debt