Chapter 11 Investing

Baseball cards are a commodity.

Positive Cash Flow happens when rental income exceeds the cost of ownership.

A franchise is a contract to sell an existing company's products and services in a set way.

Which type of business has only one owner?

This bond can be repayed early if interest rates are dropping.

An angel investor offers advice and $ but has no ownership or liability.

The Roth IRA is tax deferred and only the interest is taxed when withdrawn.

A 401(k) requires employers to contribute.

The higher the rating of a bond, the lower the interest rate you will earn.

All retirement accounts require you to withdraw by 70 1/2.

Common stock guarentees a fixed dividend but no voting rights.

A single owner of a personal residence does not have to pay taxes when the sales profit is no more than

ROI is found by: profit divided by amount invested.

An I-Bond is a government security that is adjusted for inflation.

Zero coupon bonds do not provide payments but instead are sold at a great discount.

Which of the following is NOT insured by the FDIC?

Annuities are contracts purchased from insurance companies that guarantee a series of monthly payments for a set time.

If one withdraws early from a CD, they may lose some principal.

Investing in a REIT is direct investing.

If you want to have a say in the company operations you should become a silent partner.

Choosing a combination of funds within a mutual fund is called asset allocation.

The best investment you can make (considered by many).

Common stock is riskier than Preferred stock.

Mutual funds are a great way to get started with which investing?

Junk bonds are named this because they pay a low rate of return.

TIPS factor in inflation and allow you to recieve the higer face value.

An option is the obligation to buy stock of a specific commodity for a set price within a set time.

The biggest risk you face with a CD is

A way for both sellers and buyers to hedge the likelihood of losing money in the future.

Government securities sold at face value for terms of 4-52 weeks are