Personal Finance: Chapter 8 - Investing and Retirement

Question 1

What investment offers moderate risk for above-average growth?

Accepted Answer

Mutual funds

Question 2

A savings account sold by an insurance company providing payments, after retirement is a/an

Accepted Answer

annuity

Question 3

Nonprofit organizations such as schools, churches, & hospitals offer a retirement plan known as

Accepted Answer

403(b)

Question 4

What is a debt instrument by which the company owes you money; a form of I.O.U.?

Accepted Answer

bond

Question 5

The practice of dividing your money into several different types of investments is called

Accepted Answer

diversification

Question 6

As liquidity goes down, what happens to the rate of return?

Accepted Answer

It goes up

Question 7

Savings accounts and money-market accounts are most appropriate for:

Accepted Answer

emergency funds and short-term goals

Question 8

What does FDIC represent?

Accepted Answer

Federal Deposit Insurance Corporation

Question 9

Invested money should not be used for a suggested minimum of

Accepted Answer

five years.

Question 10

The ability to quickly convert your assets into cash without any loss of value is called

Accepted Answer

liquidity

Question 11

An account used for retirement savings that will NOT be subject to income tax upon withdrawal

Accepted Answer

a Roth IRA

Question 12

The relationship of substantial reward compared to the amount of risk taken is called

Accepted Answer

risk-return ratio

Question 13

A CD is a

Accepted Answer

certificate of deposit

Question 14

Money paid to investors based on a company's earnings are called

Accepted Answer

dividends

Question 15

What agency is responsible for regulating the stock market?

Accepted Answer

Securities Exchange Commission

Question 16

What agency is responsible for collecting taxes?

Accepted Answer

Internal Revenue Service

Question 17

As a young adult, what is the most important thing you can invest in?

Accepted Answer

Yourself

Question 18

Securities that represent part ownership or equity in a single corporation are called

Accepted Answer

stocks

Question 19

A piece of ownership in a company, mutual fund, or other investment is called

Accepted Answer

share

Question 20

T or F Saving and investing have nothing to do with the amount of money you make.

Accepted Answer

True

Questions 20