Study guide

Question 1

What are the first five steps of investing?

Answer 1

1) Set asideaside emergency fund (500-1000)
2) Pay off all debt first
3) Save 3-6 months of expenses as a fully funded emergency fund
4) use tax free savings options (Roth IRA)
5) 15% of income into pre-tax saving options

Question 2

What is the most important thing to consider when looking for a house?

Answer 2

location

Question 3

savings is primarily for ________ goals

Answer 3

short-term

Question 4

Investing is primarily to help you with _______ goals

Answer 4

long term

Question 5

A promise to pay a definite amount of money at a stated interest rate on a specified maturity rate

Answer 5

Bond

Question 6

“Be fearful when others are being greedy, be greedy when others are being fearful”

• __________

Answer 6

Warren Buffet

Question 7

What does P/E stand for?

Answer 7

Price to earning ratio

Question 8

What does EPS stand for?

Answer 8

earnings per share

Question 9

what does Beta tell you about a stock

Answer 9

volatility of a stock

Question 10

what time does the stock market open

Answer 10

9;00am

Question 11

what time does the stock market close

Answer 11

4:00pm

Question 12

what is the volume of a stock

Answer 12

shares brought and sold

Question 13

Why should you invest in gold, silver, and other precious metals

Answer 13

helps protect against
- inflation
- weak dollar

Question 14

what is an advantage of a Roth IRA?

Answer 14

no taxes when you take the money out

Question 15

disadvantage of 401k

Answer 15

taxed when you have to take money out

Question 16

advantage of a basic stock account

Answer 16

pull out your money whenever you want

Question 17

the disadvantage of a basic stock account

Answer 17

money is taxed

Question 18

disadvantage of annuities

Answer 18

• long and confusing contracts
• low returns
• less to give to other relatives

Question 19

if a penny doubles every 30 days how much money would you have

Answer 19

10,737,418.24

Question 20

if a nickel doubles every 30 days how much money would you have

Answer 20

53,687,091.20

Question 21

What is an ideal PE ratio?

Answer 21

15

Question 22

if you own a common stock do you have voting rights?

Answer 22

yes

Question 23

“He who understands it earns it… He who doesn’t pays it…”
- _____________________

Answer 23

Albert Einstein