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Saving and Investing
Saving and Investing
35 terms
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#saving #savings #investing #takecharge
Flashcards
35 cards
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Questions
35
Answers
1
It is recommended you should save _______ months of expenses to be more secure
3
5
6
4
2
It is recommended you save _______ of your net income
20%
30%
25%
10%
3
The Rule of 72 states how fast an investment or debt
Doubles
Triples
Is not realistic
Interest rate doubles
4
Stockholder may or may not receive dividends
False
True
5
Compound interest is the same as saying
Any form of interest earned from saving or investing
Earning interest on interest
The effect interest has on the total return on investment
Interest earned on the principal investment
6
Profit or income generated by saving and investing is called
return
rate
saving
investment
7
Money invested is usually used for ________ term goals
long
short
8
______ investments have the potential for many fluctuations in return over a short period
Certificates of Deposit
Bonds
Speculative
Real Estate
9
Portion of income not spent on expenses is placed into a _____________ account.
investment
spending money
savings
profit
10
This account earns the best interest rate
savings
cd
money market
checking
11
Specified time in the future when the principal amount of the bond is repaid to the bondholder
maturity date
interest date
bond date
investment date
12
When someone sells real estate or stocks for higher than the purchase price. This is known as?
Capital Loss
Not possible
Capital Gains
Smart investing
13
This account requires you to have account for a specific period of time
savings
money market
checking
CD
14
Share of profits distributed in cash to stockholders are called _____________
Dividends
Interest
Profit
Rate
15
Assets purchased with the goal of providing additional income is called
investments
money market account
profit
savings
16
In the Financial Pyramid of Investment Risk, the top layer is
Basic Financial Planning
Capital Growth
Financial Growth
Income
17
Charging others for the use of property
Mortgage
Rent
Bonds
Loans
18
Company combines funds of many different investors and invests money in a diversified portfolio
bond
savings account
real estate
mutual fund
19
What is a trade-off?
Lower Risk = Higher Potential Return
Higher Risk = Losing Everything
Higher Risk = Higher Potential Return
Higher Risk = Lower Potential Return
20
Investing in a mutual fund is an automatic form of portfolio diversification
False
True
21
The percentage rate paid on money invested or saved
Interest Rate
Interest
Rule of Interest
Dividend
22
Which account is more liquid, which means how quickly the asset can be turned into cash
CD
checking
savings
money market
23
Higher Risk = Higher Potential Return is an example of a
Tradeoff
Risk
Investment
Savings
24
Form of lending to a company or the government
real estate
stocks
bond
speculative investment
25
This account requires a minimum deposit and may have limited withdrawals
personal
checking
money market
savings
26
The owner of the stock is called the __________________
Risk Taker
Manager
Share Holder
Supervisor
27
Possibility that an investment will fail to pay the expected return is the definition of?
Rate of Return
Profit Margin
Investment Risk
Interest Rate
28
Reduces risk by spreading money among a wide array of investments
Portfolio Diversification
Buying Stock
Selling Stock
Money Funds
29
An example of a long term investment is
House
Car
Bike
Vacation
30
Investment in the ownership of residential or commercial property or land
Mutual Fund
Real Estate
Money Market
Bonds
31
Real estate can be time consuming but the potential for return is high
True
False
32
Unearned income received from the sale of an asset above its purchase price
Real Estate Gains
Capital Gains
Certificate of Deposit Gains
Savings Gains
33
Saving money because you are planning in case you lose your job is an example of saving for
an emergency
a particular purchase
retirement
a goal
34
Investments have the potential for _______ returns
higher
lower
35
A share of ownership in a company
Rent
Saving
Bond
Stock