stud
bud
Sign up
Log in
Home
Library
Explore
SAT
More
MHS PF Unit 4 Savings and Investing Flashcards | StudBud
Explore
/
MHS PF Unit 4 Savings and Investing
MHS PF Unit 4 Savings and Investing
34 terms
·
StudBud Administration
·
180 plays
Imported from external platform
Flashcards
34 cards
F
Practice quiz
P
Host live
L
Questions
34
Answers
1
What is the largest equities market in the world?
NASDAQ market
Over-the-counter (OTC) market
American Stock Exchange (AMEX)
New York Stock Exchange (NYSE)
2
Which of the following is your right as a shareholder of common stock?
The right to receive discounts on products or service
The right to receive interest payments
The right to hire officers of the corporation
The right to receive dividends if paid
3
Which compounding frequency will earn you the MOST money when opening a compound savings acct.?
Compounding 1 time a year
Compounding monthly
Compounding daily
Compounding 4 times a year
4
A pharmacy is to drugs as the American Stock Exchange is to:
Securities
Stock advisors
Mutual Funds
Interest
5
Which of the following is generally true about savings vehicles?
Savings vehicles are only useful for long-term investments
All of the choice are generally true
People should evaluate savings vehicles based on their needs
Savings vehicles are never insured
6
Which of the following savings vehicles usually requires a high minimum balance?
Simple savings account
All of the choices
Certificate of Deposit (CD)
Checking account
7
When you buy a ____ , you are loaning money to an organization
Mutual fund
Stock
Bond
Index fund
8
A company offer a defined-contribution pension plan: upon retirement the employee will receive
an amount based only on how long the employee worked there
a specified amount based fully on profit earned while there
one-half of the employee’s last year’s salary.
the total amount contributed plus investment earnings.
9
Which of the following is generally true about 401(k) and 403(b) retirement plans?
All of the choices are correct
They offer some tax benefits
They restrict when you can withdraw your money
They are plans offered through employers
10
Buyinga treasury bill (T-bill) is best for investors who are looking for
aplace to invest between $100-$500
aninvestment that matures in 10-30 years
asecure, low risk investment
ahigher yield on their investment than corporate bonds offer
11
The profit from a house investment with three apartment rentals may be lower than expected if
taxes on the house are lowered.
tenant in an apartment decided to paint the hallways.
mortgage on the house is paid off.
one of the apartments is not rented.
12
Which best describes the difference between stocks and bonds?
Stocks are more reliable; bonds tend to be more volatile
Stocks provide part ownership; bonds are loans to a company
Investors of stocks share profits; bonds share company debt
Stocks pay interest all year; bonds pay at fixed times
13
When it comes to saving money, what is a good rule of thumb?
Putting anything you can’t afford on your credit card
Choose the savings account with the lowest interest rate
Keep most of your savings in your checking account
Put aside money for savings each month
14
To find out the time value of depositing $100 into savings, you need to know the interest rate
and whether the account is FDIC protected
and whether the bank offers overdraft protection
and the rate of inflation
and your total income
15
What is the primary reason to issue stock?
To help investors 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
16
After 5 years of owning a Roth IRA, you can withdraw money from a Roth IRA to buy a first home
and owed taxes are deferred until retirement
tax and penalty free.
but must pay a set penalty at the time of withdrawal
and have penalties deferred until retirement
17
Which of the following accounts will give you the LEAST access to your money?
Simple savings account
Certificate of Deposit (CD)
Cash
Checking account
18
Sellecting from the following examples, the highest risk portfolio would be made up of
60% stocks, 30% mutual funds, and 10% Treasury bonds
70% mutual funds, 10% stocks, and 20% Treasury bonds
40% mutual funds, 40% Treasury bonds, 10% stocks
20% savings accounts, 50% mutual funds, and 30% bonds
19
When it comes to investing, what is the typical relationship between risk andreturn?
It depends on the investment mix in your portfolio
There is no relationship between risk and return
Greater the potential risk, the smaller the potential return
Greater the potential risk, the greater the potential return
20
You should open a savings account that earns _______ interest and has the______ interest rate.
compound; lowest
compound; highest
simple; highest
simple; lowest
21
The purpose of a budget is to:
help plan how you will spend the money you earn or receive
tell you how much you owe the government in taxes
stop you from spending too much money
increase the balance of your savings account
22
Which of the following is a type of savings vehicle?
1. Certificate of Deposit
Both 1 & 2
2. Money Market Account
3. Checking Account
23
If Jan believes interest rates will fall soon and remain low for a while, she should invest in
Nothing, she should put her money under her mattress.
A variable rate certificate of deposit.
A short-term, fixed rate certificate of deposit.
A long-term, fixed rate certificate of deposit.
24
A qualified investor buys 1000 shares of common stock at $50/share on 50% margin. This means
the investor will pay only $5000 for the shares
a brokerage firm owes 50% of 1000 shares of stock purchased
the brokerage firm is lending the investor 50% of the money
the investor is buying 2000 shares
25
An Investor owning 40 shares of stock at $80 per share after a 2-for-1 stock split will now own
80shares of the stock and the price of each share is $40
80shares of the stock and the price of each share is $80
20shares of the stock and the price of each share is $80
40shares of the stock and the price of each share is $40
26
Diversification is important in investing because…
It helps balance the risk across varied types of investments
It increases overall risk, guaranting making more money
It ensures that you only make low-risk investments
It helps gain the highest rate of return despite any risks
27
Which of the following actions would enable you to earn MORE interest in a new savings account?
1. Selecting an account with a high interest rate.
2. Leaving money in the account for long period of time.
3. Transferring money into a checking account each month.
Both 1 & 2
28
If an investment is considered “volatile”, it means…
the investment is high-risk; its price will increase fast
the investment is undervalued and may increase over time
the investment will experience rapid growth over time
the value of the investment may be hard to predict
29
The interest earned on United States Series EE Savings Bonds is
exempt form state and local taxes
paid in a lump sum when the bond's face value is reached
equal to the money paid to purchase it
deducted at the time of the bond’s purchase
30
How can investors receive compounding returns?
Invest their earnings back into their original investment.
Transfer their earnings into a high-risk investment.
Diversify their investment portfolio.
Select a savings account that has a higher interest rate.
31
Before the Kiss Corporation can issue stocks or bonds, it must register the issues
The Federal Reserve
The World Bank
The Securities and Exchange Commission (SEC)
Its Board of Directors
32
A person decides to reinvest their $2.00 per share dividend; this means that the $2.00 will buy
stocks that are similar to those already owned.
more of the same stock.
preferred stock in the corporation.
bonds in the corporation.
33
Interest is
a convenience charge to accessing money in your bank account
the amount owed for borrowing money
a charge for lending money to a bank
the amount added to your savings when opening a bank account
34
Which of the following correctly orders the investments from LOWEST risk to HIGHESTrisk
Stock − Treasury bond − Diversified mutual fund
Diversified mutual fund − Treasury bond − Stock
Treasury bond − Stock − Diversified mutual fund
Treasury bond − Diversified mutual fund – Stock
