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Personal Finance Chapter 11 : Investing for the Future + Personal Finance Chapter 12 - The Stoc Flashcards | StudBud
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Personal Finance Chapter 11 : Investing for the Future + Personal Finance Chapter 12 - The Stoc
Personal Finance Chapter 11 : Investing for the Future + Personal Finance Chapter 12 - The Stoc
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Answers
1
The trading on this exchange is completely virtual
NYSE
American Stock Excchange
PFSE
Nasdaq
2
The assigned dollar value given to each share of stock
Share Value
Market Value
Par Value
3
Your stock investment helps businesses make and sell new products and services
True
False
4
Beginning investments should be conservative and low risk, and they should also include a strategy for diversification.
True
False
5
Maximization of return in the next five to ten years is the goal of which strategy
systematic investing
strategic investing
initial investing
speculation
6
Which of the following is not risky investment?
bonds
penny stocks
options
futures
7
Stockholders written authorization to transfer his or her voting rights to someone else.
Stock Advisor
Replacement
Stand in
Proxy
8
_____ risk is associated with owning the stock of just one organization
High
Company
Business
Penny
9
The summary of a corporation's financial results for the year and prospect for the future
Financial Summary
Annual Report
Portfolio
NASDAQ
10
A stock that remains stable and Pays dividends during economic decline.
Blue Chip
Defensive
Blue Chip
Cyclical
11
This commission requires all public corporations to prepare an annual report each year and send it to stockholders.
DEA
SEC
IRS
CIA
12
Which is the typical first stage of investing
Speculation
Strategic investin
Put and take account
Systematic investing
13
Which of the following correctly orders the investment from Lower risk to Higher risk?
Treasury bond - Penny Stock - Stock
Treasury bond - Stock- Penny Stocks
Stock - Treasury Bond- Mutal Funds
Diversified mutual fund - Treasury bond - Stock
14
These are contracts to buy and sell commodities or stocks for a specified price on a specified date in the future.
Options
Annuities
Bonds
Futures
15
An investment that uses a range of techniques within a wide array of assets to generate a higher return with more risk.
Mutual Fund
Money Market
Hedge Fund
Securities Exchange
16
Which is a low risk investment?
an annuity
stock
corporate bond
real estate
17
Market risk is associated with owning one company's stock.
True
False
18
Which investment type typically carries the least risk?
mutual funds
individual stocks
saving accounts
treasury bonds
19
Some savings bonds are sold at a discount, or for less than their maturity value.
False
True
20
Which of these strategies is not a wise investment practice?
define goals
get good advice
go fast
keep good record
21
The spreading of risk among many types of investments
Diversification
Speculation
Systematic
22
Collection of investments
Stock packet
Group
Portfolio
Annunity
23
An increase in the number of outstanding shares of a company’s stock
Stock Share
Stock Margin
Stock Standard
Stock Split
24
A technique that involves the systematic purchase of an equal dollar amount of the same stock at regular intervals.
Dollar Cost Averaging
Short selling
Stock Splitting
Buying on margin
25
When you buy ______, you are loaning money to an organization
Mutual Fund
Stock
Bond
Index Fund
26
The OTC market does not have companies listed on any major exchange.
True
False
27
A stock index is a benchmark that investors use to judge the performance of their investments.
True
False
28
When might be the best time to start saving for retirement
At the earliest possible date
Once you pay off student loans
None of these answers
After you purchase a home
29
The average bull market often lasts three to four times as long as a bear market.
False
True
30
This type of risk is caused by the business cycle
interest-rate risk
political risk
industry risk
market risk
31
Stockholders can lose personal assets if a company fails.
True
False
32
Preferred stockholders take less risk than common stockholders.
False
True
33
The chance that inflation will rise faster than the return of your investments is called
interest rate risk
interest risk
declining interest
interest rise risk
34
Stocks that have a consistent history of paying high dividends
Standard
Income
Cyclical
Growth
35
A benchmark that investors use to judge the performance of their investments.
Stock Indexes
Stock Comparable
Stock markers
Stock Exchanges
36
Buying of stock directly from a corporation.
Company Purchase
Corporate Purchase
Corporate Investment
Direct Investment
37
The NYSE opens at 9 and closes at 4.
False
True
38
Using dividends previously earned on stocks to buy more shares.
Share growth
Dividend Expenses
Dividend Growth
Dividend Reinvestment
39
Brokerage firms charge higher per share fees when stocks are bought in odd lots
False
True
40
A public corporation is a company whose stock is traded openly on a stock exchange.
True
False
41
When it comes to investing, what is the typical relationship between risk and return?
Greater the potential risk, the smaller the potential return
It depends on the investment mix in your portfolio
Greater the potential risk, the greater the potential return
There is no relationship between risk and return
42
These are shares in young, small, corporations that have high overall risk.
Emerging
Income
Blue Chip
Growth
43
Buying 100 shares of stock or multiples of 100 shares is called a
Circle Lot
Open Lot
Odd Lot
Round Lot
44
Represents a type of stock that pays a fixed dividend but has no voting rights
Common Stock
Preferred Stock
45
Low priced stock of small companies that have no track record
Minimal stock
Penny stock
Rising stock
Common stock
46
Which of the following is generally true about 401k and 403b retirement plans
They offer some tax benefits
Plans offered through employers
All of these are true
They restrict when you can withdraw your money
47
The NYSE is located in New Jersey.
True
False
48
The S&P 500 Index follows 450 companies and their stock values.
False
True
49
What does ROI stand for?
Reusing optimal investments
Removal of investment
Return on investment
50
SEC stands for Securities Expansion Commission
False
True
51
The Rule of 72 is a technique for estimating the number of years required to triple your money at a given rate or return
False
True
52
The difference between what you paid for the stock and what you sold it for and plus any dividends you earned.
Income on Investment
Return in Stock
Return on Investment
Return on Share
53
The rule of 72 is a technique for estimating the number of years required to ___ your money
balance
double
increas
triple
54
What happens when a bond becomes due?
The issuer will pay you back, minus interest
You pay it back to the issuer, plus interest
The issuer will pay you back, plus interest
You pay it back to the issuer, minus interest
55
Stocks of large well established corporations with a solid record of profitability.
Cyclical
Growth
Income
Blue Chip
56
An investment that pools $ together with other investors to purchase a collection of stocks, bonds, or other securities.
Mutual Fund
Bond
Insurance
Stock
57
Initial investments shouldbe
temporary, low risk
permanent, high risk
conservative, low risk
conservative, high risk
58
Stocks that do well when the economy is doing well or stable but do poorly during recessions.
Cyclical
Growth
Income
Blue Chip
59
The use of long-term savings to earn a financial reward is
speculating
diversifying
gambling
investing
60
What is the primary reason to issue stock?
To help investor earn a higher rate of return
To increase investor awareness of the company
To distribute the risk of bankruptcy across more investors
To raise money to grow the company
61
Stocks in corporations that reinvest their profits into the business so that it can grow.
Income
Growth
Common
Cyclical
62
Investments usually allows your net worth to grow at a faster rate than general price levels.
True
False
63
Money paid to stockholders from the corporations earnings.
Investment
Deficit
Dividend
Income
64
People who own shares of stock.
Exchange Holders
Stockholders
Bondholders
Company Holders
65
An increase in the value of stock over time.
Dividends
Leverage
Capital Gains
Earnings Per Share
66
A prolonged period of rising stock prices and general feeling of investor optimism.
Bear Market
Bull Market
Horse Market
Sheep Market
67
A ticker symbol can be different lengths depending on what exchange they started on.
True
False
68
Inflation does not affect investment strategy.
True
False
69
What is the largest physical securities exchange?
American Stock Exchange
Canadian Stock exchange.
New York Stock Exchange
Nasdaq
70
Daily newspaper that provides detailed coverage of the business and financial world
The Economist
Wall Street Journal
Barron's
Kiplinger's Personal Finance
71
Annuities are usually distributed by insurance companies to investors with a series of regular payments at retirement.
False
True
72
The right, but not the obligation to buy or sell a commodity or stock for a specific price
discount bond
future
annuity
option
73
Ticker symbols cannot have numbers in them.
False
True
74
Which investment happens when you make bold and high risk investment choice
Speculative
Diversification
Systematic
Put and take
75
What are dividends?
None of these
Type of saving account that grows over time
Distribution of small percentage of profits to shareholders
Small part, or share of a company
76
If an investment is considered volatile, it means
the investment is high risk, and its price increases
investment is undervalued and may increase over time
the value of the investment may be hard to predict
the investment will experience rapid growth over time
77
Permanent investments are investments that will be held for 5 to 10 years or longer.
True
False
78
The largest physical stock exchange is the American Stock Exchange.
True
False
79
Diversification is important in investing because
increases your overall risk, guarantees that you make more $
it helps balance your risk across different investments
ensures that you only make low-risk investments
helps you gain the highest rate of return despite risks
80
Investing helps beat inflation, increases wealth, is fun and challenging
False
True
81
A(n) _____ is the pooling of money from many investors to buy a large selection of securities
Security bond
Treasury bond
Annunity
Mutual fund
82
General rise of prices is called
investment
price gouge
inflation
balloon
83
This is a prolonged period of falling stock prices and a general feeling of investor pessimism.
Guided Market
Horse Market
Bear Market
Bull Market
84
All of these are good wise investment practices except
define your financial goals
make decisions quickly to take advantage of the market
seek good investment advice
keep good financial records
85
This AMEX lists 3200 companies, and has more trading volume in a day than any other stock exchange in the world.
True
False
86
Generally speaking, the ___ the risk, the ____ the potential return or loss
higher; higher
Both 1 and 3
lower; higher
higher; lower
87
What best describes the difference between stocks and bonds?
Stocks you share in profits; bonds you share company debts
Stocks you own part of company, bonds are loans to company
Stocks pay interest throughout year, bonds at fixed times
Stocks are more reliable investment; bonds are more volatile
88
The price for which the stock is bought and sold in the market place.
Par Value
Market Value
Stock Value
89
A company has to meet certain revenue criteria to be traded on one of the public exchanges
False
True
90
Political risk refers to the effects of higher interest rates when you are locked into lower rates.
False
True
91
A marketplace where brokers who are representing investors meet to buy and sell securities.
Over the counter
Stock Indexes
Stock Exchange
Pink Sheets
92
Cyclical stocks do well no matter how the market is performing.
False
True
93
The selling of stock borrowed from a broker that must be replaced at a later time
Short Selling
Buying on margin
Stock Split
Pink Sheets
