©2016 Mr. Breitsprecher & BreitLinks (www.breitlinks.com) All Rights Reserved Unit 3 Review: Investing, page 1
Business & Personal Finance
Unit 2 Test Review: Investing Name: __________________________
1. In class, we made a point of contrasting savings and investing they are different
concepts. Please define each and explain how each differs from the other.
a.
b.
2. What three ways companies raise money and investors earn money supporting the growth
of a business, helping them raise money. Please identify an advantage and disadvantage
of each:
a.
b.
c.
3. What are the 2 ways investors can make money when buying stocks?
a.
b.
©2016 Mr. Breitsprecher & BreitLinks (www.breitlinks.com) All Rights Reserved Unit 3 Review: Investing, page 2
4. What are the 2 basic kinds of stock that are sold to investors and how do they differ?
a.
b.
5. Bonds often have a “call feature”. How can this benefit both the company and the
investor?
6. What are TWO reasons that bonds might be issued by governments and municipalities
be sure to explain your answer to earn credit.
a.
b.
7. What should be the first thing investors do before putting money from savings into
investing (NOTE: Investing balances risk and rewards). Be sure to explain your answer
to earn credit.
©2016 Mr. Breitsprecher & BreitLinks (www.breitlinks.com) All Rights Reserved Unit 3 Review: Investing, page 3
8. We talked about an investment strategy called “short selling”. What is this and why is it
a risky investment strategy?
9. Why is it a mistake to assume that an investment with higher risks will pay you higher
returns?
10. Why are demand deposits at a bank considered ‘safe” (savings & checking accounts)?
Please explain your answer to earn credit.