Fp120 R6 Investments Worksheet 2
University of Phoenix Material
Investments Worksheet
Answer the following questions in at least 50 words each:
What are the main differences between a 401K and a Roth IRA?
The main differences between a 401K and a Roth IRA are tax treatment, investment options and possible employer contributions. 401K plans and Roth IRAs are both popular tax- advantaged retirement saving vehicles. The two should be considered before determining which one to use. It is possible to contribute to both plans, but not with the same dollars.
How would you explain the difference between a stock, a bond, and a mutual fund? The difference between a stock, bond, and mutual fund is that a stock is ownership in a company. When you buy a stock, you buy a piece of the company. So if the company does well, you do well. Congruently, if the company tanks, your stock tanks. Just like bonds, there are many types of stocks because there are many different type of companies out there. A bond think of it like a loan, you loan your money to the government of a company, and in return they pay you interest for the term of the loan. Bonds are like conservative type of investment you choose the length of and term of the bond. A mutual fund represent another way to in stocks, bond, or cash alternatives. You can think of mutual fund like a basket of stocks or bonds. Your money is pool along with the other investors in to funds.
What are the risks and rewards of investing?
The risk and the rewards of investing through both up and down markets is that your investments may grow in value. But you have to be willing to hold on through the long term in hopes of reaching your goals. If you go the slower route with less volatile investments, your investments will probably fluctuate less but may not reward you as much in the long run.
How can you minimize the risks associated with investing?
To minimize the risks associated with investing is, Familiarize yourself with the different types of risk. Most
Investments Worksheet
Answer the following questions in at least 50 words each:
What are the main differences between a 401K and a Roth IRA?
The main differences between a 401K and a Roth IRA are tax treatment, investment options and possible employer contributions. 401K plans and Roth IRAs are both popular tax- advantaged retirement saving vehicles. The two should be considered before determining which one to use. It is possible to contribute to both plans, but not with the same dollars.
How would you explain the difference between a stock, a bond, and a mutual fund? The difference between a stock, bond, and mutual fund is that a stock is ownership in a company. When you buy a stock, you buy a piece of the company. So if the company does well, you do well. Congruently, if the company tanks, your stock tanks. Just like bonds, there are many types of stocks because there are many different type of companies out there. A bond think of it like a loan, you loan your money to the government of a company, and in return they pay you interest for the term of the loan. Bonds are like conservative type of investment you choose the length of and term of the bond. A mutual fund represent another way to in stocks, bond, or cash alternatives. You can think of mutual fund like a basket of stocks or bonds. Your money is pool along with the other investors in to funds.
What are the risks and rewards of investing?
The risk and the rewards of investing through both up and down markets is that your investments may grow in value. But you have to be willing to hold on through the long term in hopes of reaching your goals. If you go the slower route with less volatile investments, your investments will probably fluctuate less but may not reward you as much in the long run.
How can you minimize the risks associated with investing?
To minimize the risks associated with investing is, Familiarize yourself with the different types of risk. Most