Personal Finance and Econ Review (#4)

Earnings on stocks are called

• blue chip stocks
• over the counter stocks
• growth stocks
• dividends

Which of the following is NOT a stock index?

• DOW JONES
• S & P 500
• NASDAQ COMPOSITE
• P/E RATIO

This is another way stockholders can make money off stocks as a distribution of profit.

• Sell off stock

• Principle

• Buy stock

• Dividend

Earnings on stocks are called

• blue chip stocks
• over the counter stocks
• growth stocks
• dividends

Which of the following are good reasons to buy a stock index fund that invests in the S&P 500?

• It is diversified, has low fees and will "beat" the market

• It is not diversified, has high fees and will "beat" the market

• It is diversified, has low fees and historically has performed better than most mutual funds investing in big companies

• It has high fees, is diversified and historically has performed better than most mutual funds investing in big companies

This is considered an IOU and the higher the interest rate on this, the more risky it is

• Bond
• T-bill
• Money market
• Stocks

What is a mutual Fund?

• A loan an investor makes to a company or government that pays interest over time.
• A share of ownership in local government.
• A collection of investments sold as a package.
• An option to purchase something in the future at todays price.

A key difference between saving and investing is

• Saving is for everyone, investing is for the wealthy

• Your money is insured when investing, it is not in savings

• Investing has a guaranteed return, savings does not

• Saving is for emergencies & goals, investing is for long-term wealth

What is a stock?

• A loan an investor makes to a company or government that pays interest over time.
• A share of ownership in a company
• A collection of investments sold as a package.
• An option to purchase something in the future at todays price.

A diversified portfolio is desirable because

• It limits investment choice

• It's a good predictor on rate of return

• It increases risk and return

• It decreases risk