U5 Saving Investing L3 Fund. of Investing

Question 1

form of lending to a company or government

Answer 1

bond

Question 2

facilitates buying and selling of investments from stock exchange

Answer 2

brokerage firm

Question 3

completes orders to buy and sell investments

Answer 3

discount brokerage firm

Question 4

share of profits distributed in cash

Answer 4

dividend

Question 5

trained professional that helps people make investing decisions

Answer 5

financial advisor

Question 6

offer investment transactions as well as investment advice and a financial advisor

Answer 6

full-service brokerage firm

Question 7

group of similar stocks and bonds

Answer 7

index

Question 8

mutual fund that was designed to reduce fees by investing in the stocks and bonds that make up an index

Answer 8

index fund

Question 9

danger that money won’t be worth as much in the future as it is today

Answer 9

inflation risk

Question 10

rise in the general level of prices

Answer 10

inflation

Question 11

assets purchased with the goal of providing additional income from the asset itself but with the risk of loss

Answer 11

investment

Question 12

an individual’s general approach to investment risk

Answer 12

investment philosophy

Question 13

possibility that an investment will fail to pay the expected return or fail to pay a return at all

Answer 13

investment risk

Question 14

current price that a buyer is willing to pay

Answer 14

market price

Question 15

specified time in the future when the principal amount of the bond is repaid to bondholder

Answer 15

maturity date

Question 16

created when a company combines the funds of many different investors and then invest that money in a diversified portfolio of investments

Answer 16

mutual fund

Question 17

unearned income received from the sale of an asset above its purchase price

Answer 17

capital gain

Question 18

reduces risk by spreading money among a wide array of investments

Answer 18

portfolio diversification

Question 19

total return on an investment expressed as a percentage of the amount of money saved

Answer 19

rate of return

Question 20

fee charged for the use of property or land

Answer 20

rent

Question 21

profit or income generated by saving and investing

Answer 21

return

Question 22

chance of loss from an event that cannot be entirely controlled

Answer 22

risk

Question 23

have the potential for significant fluctuations in return over a short period of time

Answer 23

speculative investment

Question 24

share of ownership in a company

Answer 24

stock

Question 25

owner of a stock

Answer 25

stockholder or shareholder

Question 26

an organized, central service to buy and sell stocks, bonds and other investments that are traded

Answer 26

stock exchange

Question 27

reduce, defer or adjust the current year tax liability

Answer 27

tax-advantaged investments