Chapter 2

Question 0

Fund mutual fund that seeks to provide maximum long tern capital growth from stocks of primarily smaller companies or narrow market segments; dividend income is incidental; the most volatile fund; also referred to as a small-cap fund.

Answer 0

Aggressive Growth Stock Mutual

Question 1

contract sold by an insurance company, designed to provide payments to the holder at specified intervals, usually after retirement; the holder is taxed at the time of distribution or withdrawal, making this a tax deferred arrangement.

Answer 1

Annuity

Question 2

a debt instrument where an insurer such as a corporation, municipality or government agencies owns your money; a form of I.O.U.; the insurer makes regular interest payments on the bond and promises to pay back or redeem the face value of the bond at a specified point in the future.

Answer 2

Bond

Question 3

Certificate of Deposit usually at a bank; savings account with a slightly higher interest rate because of longer savings commitment.

Answer 3

CD

Question 4

a food, metal or fixed physical substance that investors buy or sell, usually via future contract.

Answer 4

Commodities

Question 5

To spread around ones investment dollars among several different classes of financial assets and among the security of many issuers; results in lowered risk.

Answer 5

Diversification

Question 6

Distributions of a portion of a companies earnings, decided by the board of directories, to a class of its share holders; generally distributed in the form of cash or stock.

Answer 6

Dividend

Question 7

types of annuity that guaranties a certain rate of return

Answer 7

Fixed Annuity

Question 8

A term used to designate all contracts covering the sale of financial instruments or physical commodities for future delivery on a commodity exchange.

Answer 8

Futures

Question 9

Account or arrangement in which one would put their money for long term growth; should not be withdrawn for a suggested minimum five years.

Answer 9

Investment

Question 10

Funds that buy stocks in medium size companies that have experienced some growth and still are expanding; are also called a mid-cap fund.

Answer 10

Growth Stock Mutual Fund

Question 11

Funds comprised of large, well established companies.

Answer 11

Larg-cap Fund

Question 12

Quality of an asset that permits it to be converted quickly into cash without loss of value; availability of money; when there is no more liquidity, there is typically less return.

Answer 12

Liquidity

Question 13

Fund Mutual fund containing a group of medium size companies that are growing.

Answer 13

Mid-cap

Question 14

Mutual fund that seeks to maintain a stable share price and to earn current income by investing an interest baring instrument with short term maturities.
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Answer 14

Money Market Fund

Question 15

Pool of money managed by an investment company and invested in multiple companies, bonds, etc; offers investors a variety of goals depending on the fund and its investment character; often used to generate income on a regular basis or to preserve an investors money; sometime used to invest in companies that are growing at a rapid pace.

Answer 15

Mutual Fund

Question 16

A list of your investments.

Answer 16

Portfolio

Question 17

buying real estate to rent out as an investment.

Answer 17

Rental Real Estate

Question 18

Degree of uncertainty of return on an asset; in business, the likelihood of loss or reduced profit.

Answer 18

Risk

Question 19

Mutual funds that contain international companies.

Answer 19

International Stock Mutual Fund

Question 20

Relationship of substantial reward in comparison to the amount of risk taken.

Answer 20

Risk Return Ratio

Question 21

Accounts at financial institutions that allow Saving Account Accounts at financial institutions that allow regular deposits and withdrawal. The minimum required deposits, fees charged, and interest rates paid varies among providers.

Answer 21

Saving Account

Question 22

Piece of ownership in a company or mutual fund.

Answer 22

Share

Question 23

you are buying a small piece of ownership in a company.

Answer 23

Single Stock

Question 24

Mutual fund that invest in companies who’s market value is less than 1 billion; largely consist of smaller, more volatile companies; also called aggressive growth stock mutual fund

Answer 24

Small-cap Fund

Question 25

Purchasing risky investments that present the possibility of large profits, but also pose a higher-than average possibility of loss.

Answer 25

Speculative

Question 26

The past history of something; with investments, look at the five or ten year record.

Answer 26

Track Record

Question 27

Annuity that has a varying rate of return based on the mutual funds in with one has invested; also see annuity.

Answer 27

Variable Annuity