Chapter Assessment - Financial Literacy - أول ثانوي

Chapter 4 Assessment SUMMARY 4.1. Saving and investing are related because excess money set aside in savings provides the funds that can be used for investing. ⚫ Saving and investing provide the funds needed to meet short-term, intermediate, and long-term goals. ⚫ Saving and investing provide the means for meeting expenses and enjoying leisure activities during later life and your retirement years. 4.2 Investing helps in meeting long-term life goals, which allows for the maintenance or upgrade of lifestyles. Investing helps protect money from inflation and ensure the pur- chasing power of the investment does not decrease over time. • Investing for retirement allows investors to maintain a positive life- style at the end of their working life. 4.3. Investing can be low, medium, or high risk depending on the invest- ment choice as well as external factors investors cannot control. • Investment can be long-or short term depending on the needs of the investor and each have their unique advantages and drawbacks. . There are three main investment goals which consist of safety of capital, income, and capital growth. Which is chosen depends on the individual's needs and requirements. ⚫ Investment can be direct, where there is ownership of a specific company's shares; indirect, where a financial intermediary will com- bine funds and invest on the investor's behalf; and through securi- ties, where the Investment is held for a limited time period. ⚫ Popular and safe investment tools consist of: T-bills, bonds and Sukuk, stocks, money market mutual funds, and crowdfunding. All have their unique attributes and are suitable depending on the indi- vidual circumstances of the investor. Cryptocurrency has been pop- ular in recent years but should not be regarded as a safe investment tool. 4.4. There are a number of steps that are important to remember in or- der to protect financial resources from theft. 2FA is very important to remembeswhen securing accounts. Phishing common tactic used by criminals to access your personal and financial data and make fraudulent transactions, leaving the وزارة التعليم 427-1989 CHAPTER 4 Assessment 139

victim without access to their accounts and potentially facing crimi- nal proceedings. • Identity theft can create long-term financial, emotional, and social problems which may affect the ability of the victim to access fu- ture financial products and may even negatively impact their social status. KEY TERMS For each lesson, match the terms listed with their definitions. Write the letters of the correct definitions. Lesson 4.1 Term 1 Appreciating asset Your choice Definition a an assel that cannot be easily sold or exchanged for cash without a luss in value 2 Contingencies b any asset which increases in value 3. Depreciating asser 4 Emergency fund e unplanned or possible events d a measure of how quickly an asset can be turned into cath 5 d e a strategy to increase the value of your money faster than the rate of inflation 6 Investing 7 quidity 8 Salety of principal f an amount of money set aside for unplanned expenses g an asset than loses value over time h protecting the money in your savings account Lesson 4.2 Term 1 Ufstyle 2 Tadawut All Shares Index ITASI) Your choice Definition a the Saudi Arabian Stock Exchange b the habits lastes moral standards, and economic level that combined, are the normal standard of living of an individual or group وزارة التعليم 140 Financial Literacy

Lesson 4.3 Term I Bond Your choice Definition 2 Crowdfunding 3 Dividend 4 Equity 5 Long-term Investment 6 Maturity 7 Money market mutual fund 8 Share 9 Short-term Investment 10 Stock AT SUNLIK 12 T-bill a the date on which a debt must be paid in full b a Sharla-compliant bond-like instrument used in islamic finance representing a direct asset owl jership interest cassels that an Individual or company intends to hold for period of more than three years d short-term debt obligation assued by the Saudi Arabian treasury and backed by the Saudi Arabian government with a maturay of less than one year e an indirect debt obligation Issued by governments and businesses f the use of small mounts of capital from a large numbe of Individuals to finance a new business venture g part of the profit of a company that is paid to shareholders h a financial instrument representing the ownership of a faction of the issuing company i the money value of a property ur business after delits have been subtracted jan alternative to the checking accounts savings accounts. and savings certificates issued by banks k allows the owner of the stock to own a portion of the company's awet and profit I a method of measuring the return for an Investment over a ser period of ume as a percentage 13 Vield وزارة التعليم 427-1985 massers that can be converted into or can be sold within a short period of ume typically within 1-3 years CHAPTER 4 Assessment 141

Lesson 4.4 Term 1 Tivo-factor authentication ZFAI 2 Fraud 3 Harke 4 entity theft 5 Pither 6 Plushing Your choice Definition a a common Internet cam that uses email messages to deceive vou into disclosing personal information b an attacker pretending to be a reputable-business or person in email messages or other forms of communication C someone who uses a computer system to gain unauthorized access to another system for kilata d an extra layer of security which requires another form of identification to peword, such as a finger print or security age on your mobile phone e a person or thing that is put what it claims or pretends to be f the use of your personal information by someone else without permission to commit fraud or other climes وزارة التعليم 142 Financial Literacy PROBLEMS 1. How is investing money different from saving money? 2. What is the purpose of an emergency fund?

3. Explain one example of a long-term goal that can be met with money from investments 4. Explain why investing will help maintain a lifestyle 5. Explain how investing helps protect money from inflation. 6. Explain what is meant by future financial security. 7. Explain the meaning of a long term investment. وزارة التعليم 27-1987 CHAPTER 4 Assessment 143

وزارة التعليم 144 Financial Literacy 8. Why is the willingness to accept risk important when making invest ment decisions? 9. Explain one benefit of a T-bill. 10. Explain one method of protecting financial wealth. 11. Why should you not share your bank account passwords with others? 12. Explain one common short-term issue of identity theft.

EXERCISES Choose the correct answer. 1. Which of the following is NOT a reason to save money? a. You can plan for future needs. b. Money is available for emergencies. c. You want to spend everything today. d. You have money for unplanned spending. 2. Safety of principal means investing in risky investments. a. true b. false 3. A depreciating asset gains value over time. a. true b. false 4. Investing helps meet future financial goals. a. true b. false 5. Which of the following is NOT a lifestyle factor? a. education b. habits c. tastes d. moral standards 6. TASI is the Saudi Arabian Stock Exchange Company. a. true b. false 7. Short-term investments tend to have a high level of risk and low level of security of capital. a. true b. false 8. Which of the following is NOT a main goal of investing? a. safety of capital b: safety of your health c. income apital growthنات التعليم 27-1989 CHAPTER 4 Assessment 145

مرارة الصايم 146 Financial Literacy 9. Sukuk and bonds are short term investment tools. a. true b. false 10. Keeping good records is important. a. true b. false 11. Which of the following is NOT a common short-term problem of identity theft? a. loss of money from your accounts b. inability to pay for short term costs c. changing banks d. difficulty applying for a mortgage 12. A common emotional long-term issue of identity theft is difficulty in applying for bank loans and mortgages. a. true b. false

MINI CASE Yasser's Vehicle Leasing Business Yasser's business has been very successful. His two locations are very profitable and he is making lots of profit. He now wants to open his business in every major city in Saudi Arabia and the Middle East. However, he requires a lot of investment. Yasser is going to offer shares in his business on Tadawul, and has offered all his existing staff options to buy shares in the business. Abdullah is considering whether to invest. 1. Should Abdullah invest in Yasser's Vehicle Leasing Business? 2. If Abdullah does invest in the business, is it likely to be a short-term or long-term investment? Abdullah has decided to invest into the business. However, he is not very experienced in buying stocks and shares. He sees an advert in his inbox from a person offering help with investing. All Abdullah needs to do is email the person his personal details, bank account number, and social security number. 3. Should Abdullah reply to the email? Explain your answer. وزارة التعليم 123-1989 CHAPTER 4 Assessment 147