Chapter 2

Question 1

Kiss rule

Answer 1

Keep it simple stupid

Question 2

Diversification

Answer 2

To spread around, also lowers risk

Question 3

ACD

Answer 3

Certificate of deposit, typically a bank

Question 4

With virtually all investments, as the ____ goes up, so does the potential return

Answer 4

Risk

Question 5

When discussing investments.

, ____ is available

Answer 5

Liquidity, and when there’s more liquidity, typically less return

Question 6

Money market mutual funds are ____risk. These are great for _____.

Answer 6

Low

Emergency fund

Question 7

Single stock investing carries a extremely ______ degree of risk.

Answer 7

High

Question 8

When you buy stock you are buying a small piece of _______ in the company

Answer 8

Ownership

Question 9

Your return comes as the company increases in the _____ or pays you the owner some of its profits ______.

Answer 9

Value

Dividence

Question 10

What’s a bond

Answer 10

A bond is a a debt by which the company owes you money

Question 11

Your return is the fluctuation in price in the ____rate paid. Few individuals do well with ____ ______ purchases.

Answer 11

Interest

Single bond

Question 12

What do investors pool to invest?

Answer 12

Money

Question 13

Portfolio managers manage the_____ or _______

Answer 13

Pool

Fund

Question 14

Your _____ comes as the _____ of the fund is increased.

Answer 14

Value

Return

Question 15

What should you have lots of before using real estate as an investment?

Answer 15

Money

Question 16

What are annuities?

Answer 16

Their saving accounts with an insurance company.

Question 17

What’s a fixed annuities?

Answer 17

Low interest rate around 5% , not really fixed, and are bad investment

Question 18

What are Variable annuities

Answer 18

Mutual funds sheltered by the annuity covering, thereby allowing the mutual fund to grow tax deferred

Question 19

Horrible investments…..

Answer 19

Gold, commodities and futures , day trading, and viaticals

Question 20

Growth and income funds

Answer 20

Large cap

Question 21

Always check the record when investing

Answer 21

5-10 year track record

Question 22

Spread around the risk

Answer 22

Diversification

Question 23

Piece of an ownership in a company stock

Answer 23

Share

Question 24

List of all your investments

Answer 24

Portfolio

Question 25

Least liquid of all investments

Answer 25

Rental real estate

Question 26

Degree of uncertainties of the return on a investment

Answer 26

Risk

Question 27

Aggressive growth funds

Answer 27

Small cap

Question 28

Saving account within an insurance company

Answer 28

Annuity

Question 29

Risk goes up. Return goes up

Answer 29

Risk return ratio

Question 30

Liquidity means to spread around and lower risk

Answer 30

F

Question 31

A single stock is the best place to keep your emergency fund

Answer 31

F

Question 32

A certificate of deposit is the best place to keep and emergency fund

Answer 32

F

Question 33

Diversification lowers your risk with investing

Answer 33

T

Question 34

Commodities and futures are extremely speculative in caring high risk

Answer 34

T