stud
bud
Sign up
Log in
Home
Library
Explore
SAT
More
Math Finance_Saving & Investing Flashcards | StudBud
Explore
/
Math Finance_Saving & Investing
Math Finance_Saving & Investing
34 terms
·
StudBud Administration
·
375 plays
Saving & Investing
Flashcards
34 cards
F
Practice quiz
P
Host live
L
Questions
34
Answers
1
What is inflation?
decrease in general level of prices
increase in prices
increase in demand for goods
increase in factors of production
2
Lu's credit card debt = $3,500 at 24% int.; with no payments or late fees, when will it double?
3 years
2.6 years
2.1 years
3.5 years
3
Alice saved $3,000 in a money market account; 1 year later she has $3150. Her rate of return is
6%
4.5%
5%
5.5%
4
Who discovered the magic of compound interest?
Benjamin Franklin
Albert Einstein
David Ricardo
Adam Smith
5
What is rate of return?
amount of money invested
total return divided by amount of money invested
total dollars invested
income earned
6
Real estate as an investment includes
is always a safe investment
includes house purchases
the family home as an investment for a diversified portfolio
may be risky, but has potential for large returns
7
Why is portfolio diversification important?
increases risks of investments
illustrates your investing style as aggressive
building a portfolio shows your knowledge of investing
Reduces risk of investments
8
How many months of personal expenses should you have in savings before you start investing?
12 months
3 months
6 months
1 month
9
Bo saved $2,250 in a money market account; 1 year later he has $2,430. His rate of return is
8%
5%
7%
10%
10
Return on investments are
are not taxable as income
taxable as income
earnings the IRS doesn't care about
are not considered income to be reported to the IRS
11
What is risk as associated with investments?
the chance you take when you buy a car
the chance you take when you buy a house
possibility that an investment won't pay a return
the chance you take when you don't have insurance
12
A bond:
can be issued by a company or a government
all of the above
is a type of loan
is generally less risky than stocks
13
Mutual funds:
reduce risk for the investor
are a compilation of many different investors
all of the above
are diverse portfolios of investment tools & methods
14
Tax-sheltered investments are good for the investor because
they can reduce taxable income in the current year
the IRS doesn't understand how they work
because they are a shelter for the taxpayer to live in
they sound impressive
15
An index fund is
a list of mutual funds in alphabetical order
a type of mutual fund with higher fees
a mutual fund that is made up of only stocks
a type of mutual fund with lower fees
16
What are liquid assets?
things you own that can easily be converted to cash
stock in companies that produce liquids
land, labor, capital
things you own that are difficult to converted to cash
17
Who is this & what did he discover?
the new world
penicillin
compound interest formula
the Dewey decimal system
18
How many months of expenses should you have in an emergency fund?
1 months
3 months
12 months
6 months
19
The Rule of 72
# of dollars that must be earned to show investment profit
# of years needed to show an investment's profit
calculates the # of weeks needed to show a profit
calculates the # of years needed to double the principle
20
T/F: Stocks, bonds, & mutual funds are all investment tools.
False
True
21
What is investing?
purchase of assets to develop financial security
accumulation of wealth
purchase of assets for increasing future income
all of the above
22
What is a long term goal?
something you want to accomplish in the near future
something you plan to accomplish in less than 12 months
something you kick a football through
something you plan to accomplish in more than 12 months
23
Sue invests $1,000 at 4.5% interest. How long will it take her money to double?
17 years
15 years
16 years
15.2 years
24
Tom has $2,000 & he wants it to double in 6 years. What interest rate does he need to do this?
12%
13%
15%
10%
25
Joe just opened a money market account at 3.5% interest; how long will it take the $ to double?
20.6 years
22 years
10 years
19 years
26
Ty has invested $4,500 to start college in 5 years. What % int, does he need to double his $?
12%
14.4%
13.1%
17%
27
What is a stock?
ownership in a corporation
stuff on store shelves
dividends paid
rate of return
28
Jo invests to send her son to college in 8 yrs; what % interest does she need to double her $?
10.5%
9%
8%
5.3%
29
The purpose of savings is to:
develop financial security
so you can support your gambling addiction
use for a fantastic vacation trip
have money to play with
30
Employee-sponsored investment accounts are good for employees because
all of the above
some employers offer a matching option for funds contributed
money is deducted automatically from the employee's paycheck
enable the employee to reduce their taxable income
31
Al's credit card debt = $5,000 at 21% int.; with no payments or late fees, when will it double?
5.1 years
3.4 years
2.3 years
4.2 years
32
When investing in speculative investments, one should
have enough financial security to offset the cost of failure
embrace opportunities to invest in cutting edge investments
invest, regardless of the risk
invest because they are safe, solid investment opportunities
33
A novice investor should
flip a coin when trying to decide what to buy
use a discount broker, since their fees are lower
select investments based on what his/her friends buy
get help & guidance from an experienced investment firm
34
Zoe wants to buy a house in 10 yrs; what % interest does she need to double her $ in that time?
5%
7.2%
15%
10%
