The difference between a stock and a corporate bond is

A bond is a loan company that must be paid back

What is the difference between investing in mutual funds as opposed to stocks and/or bonds?

It is much more difficult to own many stocks with limited $

What is diversification?

spreading your risk among a wide variety of investments

If an investment is more risky,

You should expect a higher rate of return on investment

Which of the following is NOT a way financial planners get paid?

they are employees of the IRS,paid by the federal government

A bear Market is one where

Stock prices are flat or decreasing

Which of the following is NOT a characteristic of Social Security?

You pay SS tax when you file your tax return annually

Which of the following is NOT a feature of a 401(k) plan?

great way for self employed to save for retirement

The difference between a traditional and Roth IRA is

Roth IRAs allow withdrawal without penalty anytime

an arrangement where your employer continues to provide you

How should your investment portfolio change as you get older?

Shift larger %'s into safer investments

Which of the following is a way you can buy a share of stock?

Purchase it through a brokerage company

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EPF Finance Unit 3

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Stocks, Bonds, and investment Questions

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Questions 19

Answers

1
The difference between a stock and a corporate bond is
Stock is a loan to a company that must be paid back
A bond is a loan company that must be paid back
Bonds pay dividends while stocks don't
Stocks are traded on open market, bonds are bought by banks
2
Which of the following is NOT an expense associated with a mutual fund?
transaction float fee
annual expense ratio
back-end load
front-end load
3
What is the difference between investing in mutual funds as opposed to stocks and/or bonds?
Mutual funds are more expensive than stocks/bonds
it is easier to own a wide range when buying individually
It is much more difficult to own many stocks with limited $
Mutaul funds only invest in commodities markets
4
A bull Market is one where
Stock prices equal bond prices
Stock prices mirror what is going on in the economy
Stock prices are going up
Stock prices are flat or decreasing
5
If you have a 10% investment in a year and inflation is 3%, what is the real rate or return?
13%
7%
10%
3.33%
6
A Keogh plan is a retirement plan for all of the following EXCEPT:
government employees
self-employed professionals
employees of small businesses
small business owners
7
Which of the following types of investment do not have a guaranteed rate of return?
stocks
bonds
money market accounts
savings account
8
What is diversification?
itemizing your risk in index funds
consolidating your risk in only one or two companies
spreading your risk among a wide variety of investments
minimize by investing in only savings and money market accts
9
If an investment is more risky,
you should expect a lower rate of return on investment
You should expect a higher rate of return on investment
it is more vulnerable to changes in inflation rate
you will invest more money into it
10
Which of the following is NOT a way financial planners get paid?
pay them a % of the money you invest through them
receive a commission with funds they represent
You pay them a flat hourly fee
they are employees of the IRS,paid by the federal government
11
Which of the following is an advantage of index funds over managed funds?
lower expense fees are paid by holders of index funds
can see how it is doing by its affiliation index (S&P 500)
Both A and B
Experienced managers ensure only stocks that are increasing
12
A bear Market is one where
Stock prices mirror what is going on in the economy
Stock prices are flat or decreasing
Stock prices equal bond prices
Stock prices are going up
13
Which of the following is NOT a characteristic of Social Security?
retire at 67 and receive full benefits
retire at 62 and receive reduced benefits
SS replaces about 40% of pre-retirement income
You pay SS tax when you file your tax return annually
14
Which of the following is NOT a feature of a 401(k) plan?
contributions and earning are not taxed until withdrawn
money deducted directly from your paycheck
Employers match up to a certain % of your contributions
great way for self employed to save for retirement
15
What is the maximum amount of deposits in a bank that are insured by the FDIC?
$1,000,000
$100,000
$250,000
$500,000
16
The difference between a traditional and Roth IRA is
Roth IRAs are for public employees, traditional R 4 private.
Roth are tax deductible, you pay taxes on traditional IRAs
Roth IRAs allow withdrawal without penalty anytime
Roth IRAs are for self employed, traditional for others
17
A pension is?
an arrangement where your employer continues to provide you
A method of setting up an (IRA)
a tax-free method of retirement planning
an investment in a 401(k) or Keogh plan
18
How should your investment portfolio change as you get older?
don't make any changes as you get older
shift larger %'s into riskier investments
shift larger %'s into individual stocks or bonds, not funds
Shift larger %'s into safer investments
19
Which of the following is a way you can buy a share of stock?
Purchase directly from the NYSE or NASDAQ
Purchase it through a brokerage company
Through the Securities Exchange Commission (SEC)
Purchase directly form the company

EPF Finance Unit 3 Flashcards | StudBud