chapter 8 review Flashcards
Long-term investments, properly diversified, include the following mutual funds:
A) Growth, balanced, international, bond
B) Growth, growth and income, international, aggressive growth
C) International, bond, aggressive growth, growth
D) Growth, growth and income, bond, aggressive growth
B) Growth, growth and income, international, aggressive growth
Which of the following is a good investment option?
A) Gold B) Viaticals C) Mutual funds D) Futures
C) Mutual funds
Which statement is true about liquidity?
A) The more liquid an investment, the more return
B) The less liquid the investment, the less return
C) The more liquid an investment, the less return
D) Both A and B
C) The more liquid an investment, the less return
A reason that people need to save and invest is to:
A) Enable their money to make money
B) Increase the money supply
C) Be able to get anything they want
D) Have an opportunity to talk with financial service providers
A) Enable their money to make money
Company Xʹs board of directors has decided to issue a portion of its earnings to its shareholders.
If you own stock in Company X, you can expect to receive a(n):
A) Investment
B) Dividend
C) Buy-out
D) Yield
B) Dividend
Savings accounts and money-market accounts are most appropriate for:
A) Long-term investments like retirement
B) Earning a high rate of return
C) Emergency funds and short-term goals
D) Savings accounts and money-market accounts should be avoided since they carry high risk
C) Emergency funds and short-term goals
The benefit of diversification in your investments is:
A) Reduced risk B) Increased return
C) Reduced tax liability D) Increased risk
A) Reduced risk
To ensure that some of your retirement savings will not be subject to income tax upon
withdrawal, you would contribute to:
A) A 401(k) B) A Roth IRA
C) An annuity D) A traditional IRA
A) A 401(k)
A young investor willing to take moderate risk for above-average growth would be most
interested in:
A) Single stocks B) Bonds C) Mutual funds D) Real estate
C) Mutual funds
In some cases, employers will match the employee contribution, but you should fund your plan whether your company matches or not. This statement refers to:
A) Single stocks B) Roth IRA C) Bond funds D) 401(k)
D) 401(k)
A retirement plan found in nonprofit organizations such as churches, hospitals and schools.
A) GIC B) 457 C) 401(k) D) 403(b)
D) 403(b)
Which of the following statements about the stock market is false?
A) The terms bull market and bear market describe upward and downward market trends.
B) The stock market is a generic term that encompasses the trading of securities.
C) The Dow Jones Industrial Average is one measure of the stock market.
D) Formed in 1792, the New York Stock Exchange (NYSE) is the smallest organized stock
exchange in the United States.
D) Formed in 1792, the New York Stock Exchange (NYSE) is the smallest organized stock
exchange in the United States.
When buying and selling investments, you should not:
A) Switch your investment strategy often, based on market conditions
B) Understand basic investment strategies and identify ones that will help you reach your goals
C) Set your investment goals and consider a time frame
D) Learn the different types of investments
A) Switch your investment strategy often, based on market conditions
Employee benefits packages:
A) Should not be a consideration when looking for a job
B) Never include retirement plans
C) Are the same regardless of the company you work for
D) Are non-wage compensations provided to employees in addition to their normal wages or salaries
D) Are non-wage compensations provided to employees in addition to their normal wages or salaries
A savings account sold by an insurance company, designed to provide payments to the holder at specified intervals, usually after retirement.
A) Money market
B) Mutual fund
C) Single stock
D) Annuity
D) Annuity
