Ch D & 6

Question 1

controlling your assets (1-3)

Answer 1

1) take an inventory of your financial assets
2) keep track of all your expenses
3) prepare a budget

Question 2

controlling your assets (4-6)

Answer 2

4) pay off your debts
5) start a savings plan
6) borrow only to buy assets that increase in value or generate income

Question 3

contrarian stock

Answer 3

buying stock when everyone else is selling or vice versa

Question 4

term insurance

Answer 4

pure insurance protection for a given number of years

Question 5

whole life insurance

Answer 5

life insurance that combines pure insurance and savings

Question 6

variable life insurance

Answer 6

whole life insurance that invests the cash value of the policy in stocks or other high yielding securities

Question 7

annuity

Answer 7

a contract to make regular payments to a person for life or for a fixed period

Question 8

disability insurance

Answer 8

insurance that pays part of the cots of a long-term sickness or an accident

Question 9

umbrella policy

Answer 9

a broadly based insurance policy that saves you money because you buy all your insurance from one company

Question 10

social security

Answer 10

the old-age, survivors, and disability program established by the Social Security Act of 1935

Question 11

IRA

Answer 11

individual retirement fund: tax-differed investment plan that enables you to save part of your income for retirement; a traditional IRA allows people who qualify to deduct from their reported income the money they put into an account

Question 12

tax-differed contributions

Answer 12

retirement account deposits for which yo pay no current taxes, but the earnings gained are taxed as regular income when they are withdrawn at retirement

Question 13

roth IRA

Answer 13

an IRA where you don’t get up-front deductions on your taxes as you would with a traditional IRA, but the earnings grow tax-free and are also tax-free when they are withdrawn

Question 14

401(k) plan

Answer 14

savings plan that allows you t deposit pretax dollars and whose earnings compound tax-free until withdrawal, when the money is taxed at ordinary income tax rates

Question 15

will

Answer 15

document that names the guardian for your children, states how you want your assets distributed, and names the executor for your estate

Question 16

executor

Answer 16

a person who assembles and values your estate, files income and other taxes, and distributes assets

Question 17

entrepreneurship

Answer 17

accepting the risk of starting and running a business

Question 18

entrepreneurial team

Answer 18

a coup of experienced people from different areas of business who join together to form a managerial team with the skills needed to develop, make, and market a new product

Question 19

micropreneurs

Answer 19

entrepreneurs willing to accept the risk of starting and managing the type of business that remains small, lets them do the kind of work they want to do, and offers them a balanced lifestyle

Question 20

affiliate marketing

Answer 20

online marketing strategy in which a business rewards individuals or other businesses (affiliates) for each visitor or customer the affiliate sends to its website

Question 21

intrapreneurs

Answer 21

creative people who work as entrepreneurs within corporations

Question 22

enterprise zones

Answer 22

specific geographic areas to which governments try to attract private business investment by offering lower taxes and other government support

Question 23

incubators

Answer 23

centers that offer new businesses low-cost offices with basic business services

Question 24

small business

Answer 24

business that is independently owned and operated, is not dominant in its field of operation, and meets certain standards of size (set by the SBA) in terms of employees or annual receipts

Question 25

business plan

Answer 25

detailed written statement that describes the nature of the business, the target market, the advantages the business will have in relation to competition, aunt e resources and qualifications of the owner(s)

Question 26

venture capitalists

Answer 26

individuals or companies that invest in new businesses in exchange for partial ownership of those businesses

Question 27

SBA

Answer 27

(small business administration) U.S. gov agency that advises and assists small businesses by providing management training and financial advice and loans

Question 28

SBIC program

Answer 28

(small business investment company program) program through which private investment companies licensed by the SBA lend money to small businesses

Question 29

market

Answer 29

people with unsatisfied wants and needs who have both the resources and the willingness to buy

Question 30

SCORE

Answer 30

(service corps of retired executives) an SBA office with volunteers from industry, trade associations, and education who counsel small businesses at no cost (except for expenses)