Common Stock Critical Thinking Questions

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1. What are municipal bonds? Describe two different types of municipal bonds. Municipal bonds are debt securities issued by state or local governments to pay for ongoing products such as roads, schools, and airports. Two different types of municipal bonds General obligation bonds and Revenue bonds.
2. What is asset allocation? Why is this used? A asset allocation is when someone invests in a variety of places to reduce the overall risk of investing. Asset allocation is for when individuals reduce their overall risk because their money is tied up in investment. You can invest in seven different types of investments, which are bonds or real estate and it remains the value.
3. What are common stocks? What are the advantages and disadvantages of common stocks? Common
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Why is it important to have your financial plan and goals in place when considering investments? It is important to have a financial plan and goal in place when considering investments because you can plan and expect certain things to happen, it is also important because you would know the risks and if it failed you would know.
2. What is one financial goal that you have? Using what we have discussed in the unit, what strategies in saving and investing could you use to reach the goal? What are the advantages and disadvantages of the strategies that you would use? One financial goal that I have is to go to college and pay for it. The strategies I could do in saving and investing for me to reach my goal would be to make a savings account and have an asset allocation. A advantage would being able to make the amount of money for college. A disadvantage would be to not get enough money and fail to successfully reach my goal.
3. What are some of the ways to reduce the risks of investing money? Some ways to reduce the risks of investing money would be you must know how to manage your investment. You could also set aside some money to ensure your remain financially