Personal Finance - Chapter 10

The chance that the rate of inflation will rise faster than your investment rate of return

Gains will typically exceed losses over the 30-40 years of investing.

A strategy that involves a planned approach to making investments on a regular basis

This is the process of ensuring that your will is valid before distributing your assets.

Which of the following is not a high risk = high return potential investments

A fund or an organization established and maintained for the purpose of supporting an institution or a cause

A performance measure used to evaluate the efficiency of an investment

This type of investment risk is best associated with rapidly rising prices

This document typically accompanies a will and outlines your end of life directive if you do not recover from an injury

Ownership interest in a publicly held company

If you die with out a will your estate is said to be in

Which is not a characteristic of an ideal investment

At approximately what age should you start to plan your retirement

This investment risk is best associated with the increase or decrease in taxes or laws that affect your investments

This market is when optimism and consumer confidence is high.

The accumulation of assets over your lifetime

This type of investment risk is best associated with the fluctuations in business cycles.

The potential for change in the value of your investment

Which is not a purpose of savings and investing

The ability to meet current and future needs while living comfortably

This is the person that you outline in your will to ensure that your property is distributed as you outlined

The chance that the factors affecting an industry as a whole will affect the value of an investment

Money in a money market account or a savings account are considered to be low earning investments

In dollar cost averaging an investor does not have to study the trends or performance of a stock

Unplanned or possible events

All investments have a positive Rate of Return

If you have faith in a company you should move all of your investments to that stock.

Inflation risk affects the principal in your investments.

An investment that is not subject to taxation

Investments should always increase in value in the short term.

During this market is when you will see investors performing profit taking

Most investment strategies are for the short term

A strategy that involves regularly setting aside cash that can be used to achieve goals

Money set aside for unplanned expenses

Which of the following is not a Tax Exempt Investment

Buying and selling stocks based on what the market is expected to do

The chance that events unrelated to market trends will affect the value of an investment

Which of the following investment strategies does not have the strongest safety of principal strategy

During this market you will see investors doing a lot of buying which may cause a temporary rise in overall stock prices

The chance that changes in the business cycle will affect the value of an investment

In Chapter 4, we learned about Working Savings. Which of the below is best represented by working savings

A collection of investments

This type of investment risk is best associated with the actions that a company might take that affect your investment

The chance that actions taken by the government will affect the value of your investment

Any place where investments are bought and sold

A debt instrument issued by a corporation or government

Selling stocks in a bull market while the price is high before a bear market

The purpose of investing is to keep pace with inflation

Which is not an example of a risk free investment

What is another name for saving

Money set aside for the future

Investing the same amount of money on a regular basis regardless of market conditions

Holding a variety of investments for the purpose of reducing overall risk

This market is when stocks lose value and investors are pessimistic.

A prolonged period of rising stock prices and general feeling of investor optimism

A good investment strategy is to Buy Low and Sell High

A strategy to earn more on your money than the rate of inflation

A technique for making investment choices by following the prices of stocks over time

A postponement of taxes to be paid

The chance that activities or events that affect a company will change the value of an investment in that company

There are no tax advantages to tax deferral savings

When you see your investment portfolio rise in value, these are real increases in your wealth

A professionally managed collection of stocks, bonds, in a diversified portfolio in one holding

Which of the following types of wills is best described by a software package that you can buy to generate a short will.

Going to Vegas and playing roulette has a better chance of a higher return than investing in a certificate of deposit.

Economics and world events are predictable

A period of steadily decreasing stock prices and investor pessimism

Usually later in life, when you are not working but are able to meet expenses through other income sources

Dividends do not increase the principal of your investments

Which of the following types of wills is best described by a document that you write in your own handwriting.

Building Financial Security is a strategy that occurs

A bond is a debt instrument and an investment instrument

Understanding the economy and the general conditions of the market can help to determine when to

A measure of how quickly an asset can be turned into cash

Which type of wills is best described by a complicated document that would require lawyers to assist in writing.

Speculative investments are High Risk with Low Earning Potential