investing and retirement

Question 1

Money that is invested, either tax deferred or tax free, within a retirement plan

Answer 1

tax favored dollars

Question 2

If you leave a job and have money saved in your employer’s retirement plan, always roll that money into an IRA using a direct rollover, which allows you to avoid taxes and penalties.

Answer 2

true

Question 3

You should start investing as soon as you have your college education funded

Answer 3

true

Question 4

Piece of ownership in a company, mutual fund or other investment

Answer 4

share

Question 5

Employee benefits packages:

Answer 5

Are non-wage compensations provided to employees in addition to their normal wages or salaries

Question 6

A savings account sold by an insurance company, designed to provide payments to the holder at specified intervals, usually after retirement.

Answer 6

annuity

Question 7

A young investor willing to take moderate risk for above-average growth would be most interested in:

Answer 7

mutual funds

Question 8

A list of your investments

Answer 8

portfolio

Question 9

A reason that people need to save and invest is to

Answer 9

enable their money to name money

Question 10

Which of the following is a good investment option?

Answer 10

mutual funds

Question 11

A savings plan operated by a state or educational institution designed to help families set aside funds for future college costs

Answer 11

529 plan

Question 12

If you get into financial trouble, borrowing against your retirement plan is a good option.

Answer 12

false

Question 13

Savings accounts and money-market accounts are most appropriate for:

Answer 13

emergency funds and short term goals

Question 14

Distribution of a portion of a company’s earnings, decided by the board of directors, to a class of its shareholders

Answer 14

dividend

Question 15

A retirement plan found in nonprofit organizations such as churches, hospitals and schools.

Answer 15

403(b)

Question 16

To ensure that some of your retirement savings will not be subject to income tax upon withdrawal, you would contribute to

Answer 16

a roth IRA

Question 17

When buying and selling investments, you should not:

Answer 17

Switch your investment strategy often, based on market conditions

Question 18

Relationship of substantial reward compared to the amount of risk taken

Answer 18

risk-return ratio

Question 19

Quality of an asset that permits it to be converted quickly into cash without loss of value; availability of money

Answer 19

liquidity

Question 20

Which statement is false about liquidity?

1. The more liquid an investment, the more return
2. The less liquid the investment, the less return
3. The more liquid an investment, the less return
4. Both A and B

Answer 20

both a and b

Question 21

Securities that represent part ownership or equity in a corporation

Answer 21

stocks

Question 22

The benefit of diversification in your investments is:

Answer 22

reduced risk

Question 23

A mutual fund portfolio that is properly diversified will have all investment dollars located in just one of four different classes of financial assets.

Answer 23

false

Question 24

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):

Answer 24

dividend

Question 25

You can start investing with a small amount of money.

Answer 25

true

Question 26

Saving and investing have nothing to do with the amount of money you make.

Answer 26

true

Question 27

Single stocks and mutual funds carry the same amount of risk.

Answer 27

false

Question 28

The purpose of war bonds is to finance military operations during war time. The last time the United States issued war bonds was during the Vietnam War

Answer 28

false

Question 29

Long-term investments, properly diversified, include the following mutual funds:

Answer 29

Growth, growth and income, international, aggressive growth

Question 30

The government agency responsible for regulating the stock market

Answer 30

securities exchange commission

Question 31

Money markets are great for your emergency fund due to their liquidity and stability.

Answer 31

true

Question 32

Good investment portfolios are extremely complex.

Answer 32

false

Question 33

Which of the following statements about the stock market is false?

1. The terms bull market and bear market describe upward and downward market trends.
2. Formed in 1792, the New York Stock Exchange (NYSE) is the smallest organized stock exchange in the United States.
3. The stock market is a generic term that encompasses the trading of securities.
4. The Dow Jones Industrial Average is one measure of the stock market.

Answer 33

Formed in 1792, the New York Stock Exchange (NYSE) is the smallest organized stock exchange in the United States.

Question 34

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:

Answer 34

401(k)

Question 35

Federal agency responsible for collecting taxes and for the interpretation and enforcement of the Internal Revenue Code

Answer 35

internal revenue service