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Duplicate of Unit 4 Review Flashcards | StudBud
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Duplicate of Unit 4 Review
Duplicate of Unit 4 Review
30 terms
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Chapters 10, 11, 12
Flashcards
30 cards
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Practice quiz
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Questions
30
Answers
1
Which of these needs is considered to be a long term need?
buying holiday gifts
buying items for a hobby
taking a vacation
buying a house
2
Return on Investment (ROI) is a percentage that tells you the amount an investment has grown or shrunk over time.
True
False
3
Which of these is a tax-deferred plan for employees of nonprofit organizations?
401(k) plan
403(b) plan
spousal IRA
pension plan
4
Investment-grade corporate bonds have high ratings and are considered fairly low-risk.
True
False
5
Which of these saving/investing options has the highest risk?
money market accounts
U.S. government bonds
stocks
savings accounts
6
Which of the following is FDIC-insured?
life insurance savings plan
brokerage account
money market fund
money market deposit account
7
Annuities provide a series of regular payments for a set period of time.
True
False
8
During retirement, it is likely that
costs related to working and a mortgage will be eliminated
all of these will occur
costs such as groceries & utilities will stay about the same
costs of medical care & prescriptions will increase
9
Which of these options is a form of indirect investment?
individual stocks
mutual funds
U.S. savings bonds
savings accounts
10
Retirement planning should begin
at middle age
right before you reach retirement age
1 year after you retire
at an early age
11
When a company issues new shares of stock to stockholders instead of paying a cash dividend
a stock split
direct investing
a cash dividend
a stock dividend
12
Initial public offering is an example of a secondary market transaction.
False
True
13
Owning stock in a lumber mill during a decline in home construction is an example of
political risk
inflation risk
stock risk
industry risk
14
Individuals who hold investments just long enough to make a quick profit on their resale
public ownership
angel investors
day traders
franchisers
15
Which of these orders is a request to buy or sell stock at the current price?
market order
stop order
discretionary order
limit order
16
Total value of a company in the stock market (total shares outstanding x price per share) is
market cap
P/E ratio
profit margin
current ratio
17
Contributions to a Roth IRA are tax-deferred.
True
False
18
Holding a variety of investments to reduce risk is known as
diversification
systematic saving
avoiding risk
dollar-cost averging
19
Most financial experts believe buying your own home is the best investment you will ever make.
True
False
20
A transaction in which you borrow part of the money from your broker to buy stock is called
selling long
buying on margin
selling short
buying and holding
21
Which of these investments is a form of direct investing?
real estate investment trusts
individual stocks
mutual funds
business plans
22
Stocks are shares of ownership in a corporation.
False
True
23
The ability to prepare for future needs and meet current expenses is called
financial security
providing for a family
retirement planning
contingency planning
24
Earnings from tax-deferred investments are completely free from tax.
False
True
25
The New York Stock Exchange is an auction market where stock is sold to the highest bidder.
True
False
26
The ideal investment would
have a high rate of return with low risk.
be fairly high-risk.
not be liquid.
have a high rate of return with high risk.
27
The chance that prices in general will rise faster than the return on investment is
industry risk
stock risk
inflation risk
investment risk
28
Which of these options is an illiquid investment (not liquid)?
checking accounts
real estate
money market accounts
savings accounts
29
An investment portfolio should
have a strong foundation of safe investments
exclude any high-risk investments
concentrate on a single industry
none of these
30
A typical CD is not a liquid investment you pay a penalty if you withdraw money before maturity
True
False
