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Saving & Investment Questions
Saving & Investment Questions
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Saving and investment questions to review for WISE Financial Literacy test.
Flashcards
25 cards
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Questions
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1
A pharmacy is to drugs as the American Stock Exchange is to:
Mutual funds
Stock advisers
Investors
Securities
2
The interest earned on United States Series EE Savings Bonds is
deducted at the time of the bond's purchase
exempt from state and local taxes.
equal to the money paid to purchase it.
pd in a lump sum when the face value on the bond is reached.
3
Before the Kiss Corporation can issue stocks or bonds, it must register the issue with:
The World Bank
The Securities and Exchange Commission (SEC)
Its Board of Directors
The Federal Reserve
4
A factor that is likely to affect the market price of a stock is:
Wages
The number of corporate employees
The age of the corporation
Corporate profits
5
A professionally managed grp of investments bought using a pool of money from investors is a
savings bond
passbook account.
Ponzi scheme
mutual fund
6
When you invest in stocks, you are helping businesses make and sell new products & services.
False
True
7
The phrase "don't put all your eggs in 1 basket" describes the following investment strategy?
Return on investment
Diversification
Pooling
Liquidity
8
Chris bought stock for $4,000 and 1 year later he sold it for $5,000. His sale resulted in a:
yield
market value
profit
capital gain
9
A daily newspaper that provides detailed coverage of the business and financial world is
Kiplinger’s Personal Finance
Barrons'
The Economist
The Wall Street Journal
10
Buying a treasury bill (T-bill) is best for investors who are looking for
a higher yield on their investment than corp. bonds offer.
a place to invest between $100-$500.
neither of these.
a secure, low risk investment
11
Dante Co.'s oil tanker collided w/a ship causing a major oil spill. Price of Dante stock will
increase
flucuate
decrease
remain unchanged
12
Mutual funds:
Contains a wide range of different investment instruments
An investment portfolio managed by the investor
Guaranteed to increase in value
Usually less risky than investing in a money market
13
A blue-chip stock can be described as:
A preferred stock
A speculative stock
A stock w/co. with a reputation for products and services
A stock that pays interest
14
The greater risk you are willing to take, the greater the potential return.
True
False
15
Lu rec'd inheritance of $100,000. He plans to invest the $$. Which carries the greatest risk?
Bonds
Regular checking accounts
Common stocks
Savings account
16
Publicly held corporations:
Are not-for-profit organizations
Guarantee a positive return to investors
Have stock that are held by public/outside investors
Are listed first on the New York Stock Exchange
17
Advantages of investing in mutual funds include all of the following
except
a guaranteed rate of return
liquidity.
professional management.
diversification.
18
Farm products (such as wheat, corn, and cattle) and metals (such as gold and silver) are called
Futures
Collectibles
Commodities
Options
19
With inflation, it takes more money to buy the same goods and services.
True
False
20
Investor owns a stock that pays a $2/share. Reinvesting that dividend, means the $2.00 will go
towards buying bonds in the corporation.
towards buying more of the same stock.
towards buying stocks similar to those already owned
towards buying preferred stock in the corporation.
21
Investor buys a house that has 3 rental apartments. The profits may be lower because
tenant in an apartment decides to paint the hallways.
taxes on the house are lowered
one of the apartments is not rented.
mortgage on the house is paid off.
22
Which of the following is the
most
risky investment?
growth fund
money market fund
income and growth fund
income fund
23
What is the largest equities market in the world?
New York Stock Exchange (NYSE)
NASDAQ market
Over-the-counter (OTC) market
American Stock Exchange (AMEX)
24
Which of the following is
most
likely to be an impulse purchase?
a candy bar
a new home stereo system
a house
a new car
25
What is the goal of an income fund?
to make current income in the form of interest or dividends
to produce current income from interest alone
to earn returns from capital gains alone
to earn returns from both dividends and capital gains
