Using digital currency as an investment

Name:

Date:

Class:

Quick Questions

Shade in the A or B circle for each question.

1. Which describes using digital currency as an investment?

A Buying it and holding it, hoping its value rises

B Using it only to pay for a bus ticket today

2. True or false: the value of a digital currency can go down as well as up.

A False

B True

3. A student buys 1 coin for $100. Later it is worth $60. What has happened?

A The value rose, so selling now would make a profit

B The value fell, so selling now would make a loss

4. Which statement about investing in digital currency is correct?

A It carries risk because you could lose money

B It is risk-free because the blockchain guarantees the price

5. An investor wants to turn their digital currency into a different currency. What do they do?

A Sell it in exchange for another currency

B Hold it until it changes into another currency by itself

Match the Pairs

Draw a line connecting each item on the left to its match on the right.

Left column		Right column
1buy and hold		ASwapping your digital currency for money such as dollars, ideally at a higher price than you paid
2sell for another currency		BWrong: a profit only happens if the value rises and you sell for more than you paid. Buying alone makes no profit.
3The value of digital currency can go up and down, so an investor can make a profit or a loss		Cbought at $100, now worth $150 or $60
4Investing carries risk, because you could lose some or all of the money you put in		Drisk: price falls from $500 to $200, loss of $300
5Investing in digital currency always makes a profit		EWrong: the value can fall as well as rise, so an investor can lose money and there is no guaranteed profit.
6You make a profit as soon as you buy the digital currency		FBuying digital currency and keeping it for a long time, hoping its value will rise

Definitions

investment

Fill in the Blanks

Complete each line of code by filling in the missing parts.

profit ← nowPrice - ________

IF nowPrice _ buyPrice THEN OUTPUT "Value has risen" ENDIF

IF nowPrice < buyPrice ____ loss ← buyPrice - nowPrice ENDIF

cash ← coins _ exchangeRate

buyPrice ← 100 nowPrice ← 80 IF nowPrice < buyPrice THEN ______ "Loss"

Spot the Error

Shade in the letter of the line that contains an error.

Question 1

A coins ← 0

B coins ← coins - 2

C OUTPUT "Holding: ", coins

Question 2

A OUTPUT price

B INPUT coins

C value ← price * coins

D OUTPUT value

Question 3

A balance ← 500

B price ← 50

C cost ← price * 4

D balance ← balance + cost

E OUTPUT balance

Question 4

A buyPrice ← 200

B sellPrice ← 150

C IF sellPrice > buyPrice THEN

D OUTPUT "Loss"

E ENDIF

Question 5

A value ← 100

B // value rises by 20

C value ← value - 20

D // value falls by 35

E value ← value - 35

Answer Key

Using digital currency as an investment

Section A: Quick Questions

A — Buying it and holding it, hoping its value rises

B — True

B — The value fell, so selling now would make a loss

A — It carries risk because you could lose money

A — Sell it in exchange for another currency

Section B: Match the Pairs

buy and hold → Buying digital currency and keeping it for a long time, hoping its value will rise

sell for another currency → Swapping your digital currency for money such as dollars, ideally at a higher price than you paid

The value of digital currency can go up and down, so an investor can make a profit or a loss → bought at $100, now worth $150 or $60

Investing carries risk, because you could lose some or all of the money you put in → risk: price falls from $500 to $200, loss of $300

Investing in digital currency always makes a profit → Wrong: the value can fall as well as rise, so an investor can lose money and there is no guaranteed profit.

You make a profit as soon as you buy the digital currency → Wrong: a profit only happens if the value rises and you sell for more than you paid. Buying alone makes no profit.

Section C: Definitions

investment — Buying digital currency and holding it, hoping its value rises so you can sell it for a profit. Its value can also fall, so you could lose money.

Section D: Fill in the Blanks

profit ← nowPrice - buyPrice

IF nowPrice > buyPrice THEN
  OUTPUT "Value has risen"
ENDIF

IF nowPrice < buyPrice THEN
  loss ← buyPrice - nowPrice
ENDIF

cash ← coins * exchangeRate

buyPrice ← 100
nowPrice ← 80
IF nowPrice < buyPrice THEN OUTPUT "Loss"

Section E: Spot the Error

B — Buying 2 coins to hold should add them to what you own. It should be coins ← coins + 2, not subtract 2.

A — The program needs the current coin price before it can work out the value. Line 1 should be INPUT price. OUTPUT would leave price with no value.

D — Buying digital currency spends money, so the cost must be taken away from the balance. It should be balance ← balance - cost.

C — A loss happens when the selling price is lower than the buying price. The condition should be sellPrice < buyPrice.

C — The comment says the value rises by 20, so 20 must be added. It should be value ← value + 20.