Personal Financial Literacy Chapter 11 Savings & Investing Options

This account earns the best interest rate

Which of the following types of bonds can be exchanged for shares of common stock?

Reduces risk by spreading money among a wide array of investments

Savings accounts typically have early withdrawal penalties.

What is a trade-off?

The percentage rate paid on money invested or saved

Money invested is usually used for ________ term goals

It is recommended you should save _______ months of expenses to be more secure

Starting a business or buying a business are the only two ways to invest in business ownership.

Deposits to a SEP account are taxed at the time they are made

A retirement account becomes portable when it is vested & can be rolled over to another account

All of the following are true about investment clubs except

Retirement plans is a tax-deferred plan for employees of nonprofit organizations?

Which account is more liquid, which means how quickly the asset can be turned into cash

A money market deposit account at a bank is a high-risk investment because it is not insured.

An example of a long term investment is

All of the following are true about government bonds except

Which of the following types of investments is a form of indirect investment?

Portion of income not spent on expenses is placed into a _____________ account.

There is no limit to the amount an employee can contribute to a 401(k) plan.

The Rule of 72 states how fast an investment or debt

______ investments have the potential for many fluctuations in return over a short period

Investment in the ownership of residential or commercial property or land

Interest earnings on corporate bonds are not taxable.

Investing in a mutual fund is an automatic form of portfolio diversification

This account requires a minimum deposit and may have limited withdrawals

Which of the following investment options typically has the highest risk?

Real estate can be time consuming but the potential for return is high

When a company makes an initial public offering (IP0),

Profit or income generated by saving and investing is called

Some corporate bonds pay interest semiannually at the coupon rate.

Common stock is considered a less risky investment than preferred stock or bonds.

If you redeem a CD early

A corporate bond is redeemed for its

Share of profits distributed in cash to stockholders are called _____________

When rental income exceeds the costs of ownership, the owner is experiencing

It is recommended you save _______ of your net income

Retirement plan in which employers sometimes match a portion of employee contributions?

Unearned income received from the sale of an asset above its purchase price

The idea of "paying yourself first" is used to describe

Specified time in the future when the principal amount of the bond is repaid to the bondholder

Higher Risk = Higher Potential Return is an example of a

Company combines funds of many different investors and invests money in a diversified portfolio

This account requires you to have account for a specific period of time

Most savings accounts are safe because they are insured by the FDIC.

Municipal bonds are issued by state governments and the federal government.

Which of the following investments is a medium-risk choice?

Speculative-grade bonds are also known as

Investments have the potential for _______ returns

Which of the following investment options is illiquid?

Compound interest is the same as saying

A Roth IRA

What grade do I feel I have truthfully earned in this class?

Which of the following types of investments is a form of direct investing?

Money in a traditional IRA may not be withdrawn before age 59 1/2 without paying a penalty.

Stockholder may or may not receive dividends

Which of the following types of bonds can be bought for half the face value?

Charging others for the use of property

Assets purchased with the goal of providing additional income is called

Possibility that an investment will fail to pay the expected return is the definition of?

A share of ownership in a company