2. Investment and savings planning.

Question 1

Inducement

Answer 1

a thing that persuades or influences someone to do something.
“companies were prepared to build only in return for massive inducements.”

Question 2

Convenience

Answer 2

This is a sense of the relative ease with which a financial instrument or institution can be accessed in terms of time and location.

Question 3

Liquidity

Answer 3

This is a measure of how quickly a financial instrument can be converted to cash.

Question 4

Reward

Answer 4

The benefit or return gained from an investment.

Question 5

Risk

Answer 5

The chance of losing money💸

Question 6

Money Market Account (MMA)

Answer 6

An interest-bearing account similar to a checking account. Deposits may be added anytime; some of this type of accounts limit the withdrawal depositors may make without penalty

Question 7

Real Estate

Answer 7

Property such as land, houses and office buildings.

Question 8

Stocks

Answer 8

An ownership share or shares of ownership in a corporation.

Question 9

Bonds

Answer 9

A certificate of indebtedness issued by a government or a publicly held corporation, promising to repay borrowed money to the lender a fixed rate of interest and at a specified time. (Government bonds are safer than corporate bonds).

Question 10

Treasury securities

Answer 10

Bonds issued by the United States Treasury to investors when the federal government borrows money.
T-bills
T-notes
T-bonds.

Question 11

T-bills

Answer 11

treasury bills have maturity of 1 year or less.

Question 12

T-notes

Answer 12

Treasury notes have maturity of 1 year to 10 years.

Question 13

T-bonds

Answer 13

Treasury bonds have maturity of more than 10 years.

Question 14

Mutual Funds

Answer 14

A pool of money used by a company to purchase a variety of stocks, bonds or money market instruments. Provides diversification and professional management for investors.

Question 15

Diversification

Answer 15

Indicates building/creating an investment portfolio that includes securities from different asset classes. It spreads risks across various financial investments, reducing the impact that poor returns from anyone investment are likely to have an overall portfolio.

Question 16

Savings

Answer 16

Money set aside for future use that is held in easily-accessed accounts, such as savings accounts and certificate of deposit (CD’s)

Question 17

Gift

Answer 17

A voluntary present of money or some other valuable asset.

Question 18

Inheritance

Answer 18

Money or the assets given to a party upon one’s death, also known as a bequest.

Question 19

Market Gains

Answer 19

Proceeds from previous investments in the form of interest payments, dividends (regular distribution of profits) or capital gains (realized income from selling an investment at a higher price than was paid for it).

Question 20

Finance Charge

Answer 20

The total cost of credit, including interest and transaction fees.

Question 21

Interest Rate Risk

Answer 21

The chance that interest rates may change (upward) while the saver is “locked in” to a (lower) rate for a time deposit ( a CD, for example) or a bond. Also the chance that interest rates may change (downward) while a borrower is “locked in” (higher rate) on a loan.

Question 22

Load

Answer 22

A fee charged for purchasing (front-end) or selling (back-end) shares of mutual fund. This fee are usually calculated as a percentage of the amount of the transaction. Some mutual funds are no-loads funds.

Question 23

Social Security System

Answer 23

A federal system of old-age, survivors,’ disability and hospital care (Medicare) Insurance which requires employers to withhold (or transfer) wages from employees paychecks and deposit that money in designated accounts.

Question 24

Federal Insurance Contributions Act (F.I.C.A.)

Answer 24

a U.S. law that mandates a payroll tax on the paychecks of employees, as well as contributions from employers, to fund the Social Security and Medicare programs. For self-employed persons, there is an equivalent law called the Self-Employed Contributions Act (SECA)

Question 25

Benefits

Answer 25

monetary payments paid to workers who have contributed to the system when they are retired or disabled or to their survivors in case of death.

Question 26

Individual Retirement Account (IRA)

Answer 26

An account in which an individual may set aside earned income in a tax-deferred savings plan for his or her retirement.

Question 27

401(k) plan

Answer 27

A type of retirement savings account allowed in the United States. This account is funded a variety of ways involving contributions from the employee and employer. in some circumstances, fund are contributed pre-tax and the proceeds are taxed upon withdrawal.

Question 28

Pension

Answer 28

An account established by a business to fund retirement benefits for its workers. This kinds of funds invest in stocks, bonds, mutual funds, and real estate.

Question 29

Keogh Plan

Answer 29

A federally-approved, tax-deferred savings program for self-employed people, allowing them to set money aside for their retirement.

Question 30

Annuity

Answer 30

A financial contract where an individual makes a series of payments over time. At an agreed-upon time, the individual stops making payments and begins to receive payments, either for the rest of their life or for a defined period of time.

Question 31

Pre-tax

Answer 31

A portion of the wage or salary that has not had taxes withheld prior to being allocated to a retirement plan or other approved benefit.

Question 32

Capital gain

Answer 32

A profit realized from the sale of property, stocks or other investments.

Question 33

Dividend

Answer 33

A share of a company’s net profits paid to stockholders.

Question 34

Exchange

Answer 34

A place for the buying and selling of stocks, bonds or other investments

Question 35

Specialist

Answer 35

An individual who works at an exchange and whose job is to make a market when none exist, essentially buying stocks when there is no buyer and selling stocks when there is no seller.

Question 36

Investing

Answer 36

The process of putting money someplace in the long term with the intention of making a financial gain.

Question 37

Speculating

Answer 37

The process of putting money someplace in the short-term with the intent of making a profit market movement. More risky than investing.