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Investments Flashcards | StudBud
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Investments
Investments
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Investment unit review.
Flashcards
40 cards
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Practice quiz
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Host live
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Questions
40
Answers
1
Which statement best reflects the philosophy of “pay yourself first”?
pay all fixed expenses before paying flexible expenses
Spend before you save
save whatever money is left over after paying monthly bills
Save before you spend
2
How liquid is a savings account?
Less liquid than mutual funds
More liquid than cash
More liquid than a Certificate of Deposit
More liquid than a checking account
3
Define investment philosophy
he rise in the general level of prices
Possibility investment will fail to pay the expected return
An individual’s general approach to investment risk
A group of similar stocks and bonds
4
Have the potential for significant fluctuations in return over a short period of time
Portfolio diversification
Speculativeinvestments
Inflation
Mortgage
5
Ownership of residential orcommercial property or land
Rent
Real Estate
Selling
Home loan
6
The owner of a stock
Stockholder
Shareholder
Neither
Both Stockholder orShareholder
7
Which of the following statements is true in regards to paying taxes on investments?
Only have to be paid on employer‐sponsored investments
Taxes are often owed on profits generated from investments.
Investments are considered unearned income they aren't paid
8
Organized, central service to buy and sell stocks, bonds and other investments that aretraded
Stock
Wall Street
Wells Fargo
Stock Exchange
9
Investments have the potential for..
No
Some
High
Low
10
You own something with other investments, such as:
None
Speculative Investments
Stocks
Real Estate
11
Facilitates the buying and selling of investments from a stock exchange
Banks
Brokerage Firm
Bond
Credit Unions
12
The profit or income generated by saving and investing
Rate of Interest
Rent
Risk
Return
13
KP wants to purchase stocks. Who would she contactto make the transaction?
A brokerage firm
A real estate agent
complete this transaction on her own
The New York Stock Exchange
14
The most common relationship between risk and return in investing can be stated as
higher risk indicates lower return
higher risk indicates higher return
lower risk indicates higher return
No relationship exists between risk and return
15
A share of ownership in a company
Shareholder
Speculative Investment
Stock
CDO
16
You are lending money with some investments, such as:
Mutual Funds
Bonds
Stocks
17
Types of return on mutual and index funds
Stock
home ownership
Interest, dividends, rents, capital gains
Futures
18
What are the most common tax advantage investments?
Retirement
Mutual Funds
Retirement and Education
Education
19
A form of lending to a company or the government (city, state, or federal)
Rent
Brokerage firm
Bond
Index fund
20
Wealth =The rate of return earned on an investment should behigher than the rate of inflation.
True
False
21
The most common employee sponsored rerement plans are called:
101 K
301 K
401K
401(k) and 403(b)
22
A mutual fund designed to reduce fees by investing in the stocks and bonds thatmake up an index
Index Fund
Bond
Mutual Fund
Index
23
A trained professional that helps people make investing decisions
Dividend
Broker
Banker
Financial Advisor
24
When organizations pays interest to thelender (purchaser) until thematurity date is reached
Bond
Stock
Mutual Fund
Check
25
When you own a stock, you expect that the market price which is
Gain
Return
Market price
26
Investing for rerement is
when the government pays for you.
not required.
must be carefully planned over a long period of me
not important.
27
The share of profits distributed in cash
Gain
Dividend
Liquidity
Return
28
Taxes must be paid on all investment profits in the year the unearned income is received.
True
False
29
Which of the following is a feature of a certificate of deposit (CD)
Funds deposited in a CD are held for a certain amt of time
Funds deposited in a CD are very liquid
Funds deposited in a CD have tiered interest rates.
Funds deposited can be accessed by check or debit card
30
Which of the following is a feature of a money market deposit account?
Unlimited transactions every month
Money must remain in account for a specific period of time
No minimum balance requirements
Tiered interest rates
31
Investments shouldn't be used for savings or short‐term goals because of two primary reasons:
Investments are not secure and are less liquid than savings
Investments are not secure and are more liquid than savings
Investments are secure and are less liquid than savings
32
Simple interest is best defined as
Earning interest on interest
The effect interest has on the total return on investment
Interest earned on the principal investment
Any form of interest earned from saving or investing
33
The rise in the general level of prices
Inflation
Igloo
Investment
Index
34
A company combines the funds of many investors&invests in diversified portfolio of investments
Mutual fund
Bond
Index Fund
Stock
35
Investments have the potenal to:
Make you broke.
Earn lower rewards and distinguish wealth.
Earn higher rewards and build wealth.
36
An individual’s investment philosophy changes throughout their lifetime.
True
False
37
The return you earn on a savings tool or investmentis made by calculang the rate of return
Total Return multiplied by Amount of $ Invested
TotalReturn divided Amount of $ Invested
38
Specified time in the future when the principal amount of thebond is repaid to the bondholder
Morning
Maturity Date
Market Price
Mutual Fund
39
The chance of loss from an event that cannot be entirely controlled
Return
Rate of loss
Reward
Risk
40
Which statement is the most correct description of liquidity?
The amount of savings available
The amount of savings available
How quickly and easily an asset can be converted into cash
Money needed to pay for the necessities
