Fin. Lit. - Unit 3 Review (Savings & Investing)

Question 1

If Brad has 20 shares of stock, each worth $10, and the company splits its stock, he now has

Accepted Answer

40 shares, each worth $5

Question 2

Which financial institution is fairly new to the financial industry?

Accepted Answer

brokerage firms

Question 3

Securities are

Accepted Answer

stocks and bonds

Question 4

Which of the following tools generally has a tier-interest rate associated with it?

Accepted Answer

money market account

Question 5

If you sell a piece of real estate for more than you paid for it, you will have to pay _______

Accepted Answer

capital gains tax

Question 6

TVM stands for

Accepted Answer

time value of money

Question 7

Most short-term savings options are fairly safe and backed by the U.S. Government.

Accepted Answer

True

Question 8

A portfolio is basically

Accepted Answer

all the different investments you are using to build wealth

Question 9

A "growth" stock generally doesn't pay dividends because

Accepted Answer

the company is reinvesting its profit $$$ into its business

Question 10

If you want to quickly calculate how to double your money at a specific interest rate, use the

Accepted Answer

rule of 72

Question 11

A stock "ticker" or "symbol" represents

Accepted Answer

name of stock

Question 12

The measure of a stocks volatility is referred to as its

Accepted Answer

beta

Question 13

Par value

Accepted Answer

is the expected dividend amount on a stock certificate

Question 14

Greater risk generally means

Accepted Answer

greater possible reward

Question 15

Which of the following is NOT one of the pros of buying a home?

Accepted Answer

repairs are taken care of by the seller

Question 16

A person should try to have at least $_________ in an emergency savings account.

Accepted Answer

1,000

Question 17

A bull market means that the stock market is doing ____________.

Accepted Answer

well

Question 18

Government bonds are relatively safe investment options because they are

Accepted Answer

backed by the government

Question 19

Interest rates at commercial banks, as compared to credit unions, are generally

Accepted Answer

higher

Question 20

Brokerages are basically the same as a savings and loan institution

Accepted Answer

False

Question 21

Which of the following is least liquid?

Accepted Answer

real estate investment

Question 22

Which of the following is NOT a term relative to the business cycle?

Accepted Answer

diversification

Question 23

Depository institutions both pay interest & charge interest to customers for various reasons

Accepted Answer

True

Question 24

The FDIC and the NCUA are

Accepted Answer

extremely similar in purpose

Question 25

P/E is a way to value a stock and compares the

Accepted Answer

price of a stock to the earnings of the stock

Question 26

The DOW Jones Industrial Average (DJIA) tracks and provides an averge (index) of ___ companies

Accepted Answer

30

Question 27

Which of the following exchanges has the strictest rules?

Accepted Answer

NYSE

Question 28

Spreading the risk level out by investing different wealth-building options is referred to as

Accepted Answer

diversification

Question 29

A stock and a bond are basically the same thing

Accepted Answer

False

Question 30

The key to PYF is

Accepted Answer

having the $$$ automatically taken and put into savings

Question 31

A progressive tax basically means that

Accepted Answer

the more you make the more taxes you pay

Question 32

If you need to have a way to manage your money and have it available quickly, you should

Accepted Answer

use a checking account

Question 33

If you want to ensure that you are paid a dividend, you should purchase ___________ stock.

Accepted Answer

preferred

Question 34

What is the "market price" of a stock?

Accepted Answer

the amount a buyer is willing to pay the seller for a stock

Question 35

Taxes that have to be paid due to home ownership are

Accepted Answer

property taxes

Question 36

There are ___________ basic types of stock.

Accepted Answer

two

Question 37

"Speculative" stocks are often trade on the ____________.

Accepted Answer

NASDAQ

Question 38

Most legitimate financial institutions will insure a depositors money up to

Accepted Answer

$250,000

Question 39

A 401K plan is one a person can get on their own at a financial institution of their choice.

Accepted Answer

false

Question 40

Which of the following is a blue-chip stock

Accepted Answer

national companies that successfully dominate an industry

Question 41

A countercyclical stock will

Accepted Answer

NOT follow the business cycle

Question 42

One of the reasons that businesses decide to issue and sell stock is to

Accepted Answer

raise money/capital

Question 43

Mutual funds are basically investor's money pooled together and diversified in stocks/bonds

Accepted Answer

true

Question 44

People invest in the stock market to build

Accepted Answer

wealth

Question 45

A financial institution that is non-profit is a

Accepted Answer

credit union

Question 46

If Samantha wants to save money for about two years and earn the best short-term interest

Accepted Answer

she should put it in a 2-year CD

Question 47

The safest saving option of the following is

Accepted Answer

U.S. Savings Bond

Question 48

A "Roth" IRA requires that you pay your taxes BEFORE investing the money in the account.

Accepted Answer

true

Question 49

Buying an item like a car, boat, or home and having equal monthly payments is called a(n)

Accepted Answer

installment loan

Question 50

Simple interest is

Accepted Answer

interest paid on the original principal amount

Fin. Lit. - Unit 3 Review (Savings & Investing)

Questions 50

Fin. Lit. - Unit 3 Review (Savings & Investing)

Questions 50