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Personal Finance Ch. 8 Investing Flashcards | StudBud
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Personal Finance Ch. 8 Investing
Personal Finance Ch. 8 Investing
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Personal Finance Ch. 8 Investing
Flashcards
27 cards
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Practice quiz
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Questions
27
Answers
1
Investments that let your money grow either tax free or tax deferred:
mutual funds
tax-favored/qualified plans
single stocks
bond funds
2
The benefit of diversification in your investment portfolio is:
reduced risk
increased risk
reduced tax liability
lower returns on your money
3
When you put money away for 5 years or MORE
investing
saving
4
The type of retirement account is offered by corporations to its employees:
403(b)
IRA (individual retirement arrangement)
401(k)
annuity
5
A properly diversified portfolio of mutual funds should be invested this way:
1/4 in each of small, large, foreign, and bond funds
1/4 in each of mid, large, foreign, and global funds
1/4 in each of small cap, mid cap, foreign, and global funds
1/4 in each of small, mid, large, and foreign funds
6
Non-profit employers such as schools, churches, & hospitals offer this type of retirement plan:
457
annuity
403(b)
401(k)
7
The least liquid type of investment is:
money market account
gold
real estate
viaticals
8
When an asset or investment can be quickly converted into cash:
diversification
capitalization
liquidity
risk
9
The distribution of profits to investors, money is paid to shareholders (stock holders):
dividends
DRIPS
risk
capital
10
Mutual funds and single stocks have the same amount of risk:
False
True
11
What is true about liquidity?
The more liquid an investment, the lower the return
The less liquid the investment, the lower the return
The more liquid the investment, the higher the return
Both answers 1 and 2
12
A savings account with an insurance company:
fixed annuity
variable annuity
403(b)
mutual fund
13
When the profits on investments are re-invested into more shares, not paid out to shareholders:
front end loads
dividends
DRIPS
interest
14
Which one is a tool for saving, not investing?
money market
mutual fund
stocks
bond fund
15
Lowering your risk of investing by spreading your money around is known as:
capitalization
diversification
risk to return ratio
liquidity
16
The type of account best suited to an emergency fund:
annuity
certificate of deposit
money market or savings account
mutual fund
17
Investing your emergency fund in a single stock is a wise investment:
True
False
18
A piece of ownership in a company, a mutual fund, or another investment:
stock or share
portfolio
401(k)
mutual fund
19
Savings accounts and money market funds are most suitable for:
Earning a high rate of return
Emergency funds and short term goals
Retirement saving/investing
Long-term investing
20
Which one is a GOOD investment option?
Viaticals
Gold
Mutual fund
Bond fund
21
You should never invest using borrowed money:
False
True
22
Single stocks carry a low degree of risk:
False
True
23
A mutual fund sold by an insurance company:
variable annuity
fixed annuity
401(k) plan
bond fund
24
The retirement investment account opened through a bank:
annuity
401(k)
IRA (individual retirement arrangement)
403(b)
25
When you start working full time, your goal is to save this % of your income for retirement:
20%
15%
5%
10%
26
Which one of the following is a BAD investment option?
gold
commodities
all of the above
single stocks
27
When you put money away for five years or less:
investing
saving