St. Petersburg College
FIN 1100
04.02 Taking Risks Use this chart to take notes from the lesson. You may also research from outside sources, however, be sure to cite these in MLA format. You must choose three different investments, one from each different risk level (aggressive, moderate, and conservative). Then respond to the questions in part two. Part One—Review the In
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04.02 Taking Risks Use this chart to take notes from the lesson. You may also research from outside sources, however, be sure to cite these in MLA format. You must choose three different investments, one from each different risk level (aggressive, moderate, and conservative). Then respond to the questions in part two. Part One—Review the Investment Types Type of Investment Explain what the investment is and how it works. Explain the level of risk and potential return on investment. Provide a realworld example of this investment. Discuss how taxes, fees, and inflation could positively or negatively impact this investment and how. Investment Choice #1 Stocks Share of ownership in a single company. Aggressive risk makes most money over a long period of time, company failure = money loss. Amazon Stocks: 2016 = $760.16 2021 = $3,557.26 Stocks are directly proportionate to inflation, therefore inflation rising equals the rising price of stocks. Stocks are taxed. There are also administrative fees on selling shares of stock. Investment Choice #2 Money Market Account Savings account that offers a higher rate of return in exchange of deposits that are large. Conservative risk, makes more money than traditional savings, may require a minimum amount of $ to invest, Lending Club Bank Offer: APY = 60% Min. Balance = 2,500$ 1 yr= 4,000$ MMAs don’t protect your money from inflation, so it may rise or fall as inflation does. May be fees if money is taken out early. Taxes are required on interest. Investment Choice #3 Real Estate Ownership of property, which may include land, homes, buildings, etc. Moderate risk, best for long-term investment, requires maintenance costs = local taxes. Requires upfront purchase for building. Becoming landlord includes regulating rent, benefits, and quality of the building. May or may not be affected by inflation, depends upon quality of property. Taxes and fees are a given, local taxes and maintenance to care for property. Part Two—Select and Explain Your Investment Plan
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