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Duplicate of Dave Ramsey Chapter 8 investments Flashcards | StudBud
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Duplicate of Dave Ramsey Chapter 8 investments
Duplicate of Dave Ramsey Chapter 8 investments
34 terms
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personal finance, chapter 8
Flashcards
34 cards
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Questions
34
Answers
1
Refers to assets that can be easily bought or sold, turned into cash.
risk
liquidity
diversification
investment
2
A mutual fund portfolio that is properly diversified will have $$ spread equally among
growth, growth & income, international, aggressive growth
international, bond, aggressive growth, growth
growth, balanced, international, bond
growth, growth and income, bond, aggressive growth
3
Account in which a person puts his money for long-term growth.
checking
investment
savings
all of the above
4
The benefit of diversification is
reduced tax liability
less risk
increased return
more risk
5
Basic rules of investing include
Never invest money in something you don't understand.
All of the above
Keep it simple, stupid!
Never invest purely for tax savings.
6
With virtually all investments, as the risk goes up, the potential return goes down.
True
False
7
The government agency responsible for regulating the stock market.
FDIC
none of the above
SEC
IRS
8
A retirement plan found at non-profit organizations like schools.
403b
401k
529 plan
IRA
9
The federal agency responsible for collecting taxes and enforcing the Internal Revenue laws.
SEC
IRS
FDIC
bank
10
This stock market is the largest.
NYSE
AMEX
NASDAQ
11
A mutual fund portfolio is set up & maintained to match investment objectives in the prospectus
True
False
12
A list of your investments.
booklet
portfolio
stock fund
prospectus
13
A savings account sold by an insurance company.
money market
annuity
single stocks
viatical
14
These are great for your emergency fund due to their liquidity and stability.
annuity
mutual fund
money market investment
real estate
15
The money a company pays you, its owner, is they have a profit.
interest
dividend
cash
interest rate
16
Non-wage compensations provided to employees in addition to their normal wages.
employee investment plans
employee compensation packages
employee benefit packages
employee salary
17
When you buy stock, you are buying a small piece of ___ in the company.
debt
ownership
all of the above
savings
18
A debt instrument by which a company owes you money. The co. makes regular interest payments.
share
annuity
bond
stock
19
A mutual fund
professionally managed
is very diversified
all of the above
is made up of a pool of money from many investors
20
The terms bull and bear market describe up and down trends in the markets.
False
True
21
Never invest using
borrowed money
All of the above
tax savings as your motivation
something you don't understand
22
The Rule of 72 is a quick way to calculate
the amount invested
the length of time it will take to double a sum of money
none of the above
the length of time it will take to triple a sum of money
23
A savings plan operated by a state designed to help families save for college costs
401k
403b
529 Plan
SEP
24
According to Dave, horrible investments include
all of the above
gold
day trading and viaticals
commodities
25
A risk-management technique that mixes a wide variety of investments within a portfolio.
none of the above
liquidity
risk
diversification
26
In this type of retirement account taxes are due upon withdrawal.
pre-tax
after-tax
27
A savings account with a slightly higher interest rate because of a longer savings commitment.
Savings account
loan
CD
Checking account
28
Investing allows your money to work for you.
True
False
29
In this retirement account, sometimes the employer will match what the employee contributes.
529
403b
401k
IRA
30
As there is more liquidity, there is typically less return.
True
False
31
To ensure that your retirement savings won't be subject to income tax on withdrawal
contribute to a traditional IRA
contribute to a Roth IRA
contribute to a 401k
contribute to an annuity
32
Used by investors to compare the expected return of an investment to the amount of risk taken.
liquidity-return ratio
diversification-risk ratio
risk-interest ratio
risk-return ratio
33
The stock market is a generic term that encompasses the trading of securities.
False
True
34
The process of setting money aside to increase wealth over time for long-term financial goals.
diversifying
loaning
borrowing
investing