Economics Ch. 11/DR Ch. 12

The three components of compound growth are money, rate of return, and _________

A market in which only the original issuer can sell or repurchase a financial asset

What is the main advantage of a mutual fund for an investor?

A person designated to take ownership of an asset if the owner of the asset dies

A retirement plan found in nonprofit organizations such as churchs, hospitals and schools.

If you leave a job and have money saved in your retirement, always roll that money into an IRA using a direct rollover

Investment analysts recommend people to make investments in:

Refers to the monetary gain or loss of an investment over time.

What is the name of the fee paid for an insurance policy?

A regular allowance for someone who has worked a certain number of years, reached a certain age, or suffered an injury

Which of the following is an advantage of a 401(k) plan?

A money market investment is based on:

The process of figuring out how much money you'll need in retirement and creating a plan to get there.

Market in which financial capital is loaned and/or borrowed for more than a year

A market in which all financial assets can be sold to someone other than the original issuer

A young investor willing to take moderate risk for above-average growth would be most interested in:

Institutions such as banks, credit unions, life insurance companies, pension funds and finance companies

Which of the following terms describes a strong stock market?

Long-term investments, properly diversified include the following mutual funds:

An index of 500 stocks used to monitor prices on the NYSE, AMEX, and the OTC market

The dollars that become available when people abstain from consumption

Good investment portfolios are extremely complex.

When making a risky investment, investors usually demand a:

The market value of a mutual fund share determined by dividing the value of the fund by the number of shares issued

Which of the following would give an investor an overall picture of the value of the market?

A period in which stock market prices move down for several months or years in a row

Most successful investors invest:

Junk bonds usually have low ratings because:

The technique of spreading funds over a large number of investments to reduce overall risk

The rate of return on a corporate, municipal, or government bond is its:

Stocks or documents that represent a claim on the income and property of the borrower such as CDs, bonds, Treasury bills

Investing your money early can earn you more money over time because of the awesome concept of ___________

The life of a bond or length of time funds are borrowed

You can start investing with a small amount of money.

Which of the following types of investments is an example of a capital market investment?

Retirement account in the form of a long-term time deposit; annual contributions not taxed until withdrawn at retirement

Roth IRA, 401(k), and 403(b) are all examples of __________.

A company that sells shares of a portfolio of securities (stocks, bonds issued by other companies) to investors

If you get into financial trouble, borrowing against your retirement plan is a good option.

Which statement is true about liquidity?

A formal contract to repay borrowed money and interest on the borrowed money at regular future intervals