Theme 4 Review

What is the primary reason people invest their money?

• To have many choices

• Learn more about real-estate

• Increase its value

• Monetize risks

Which of the following is defined as setting aside a portion of current income for future use?

• Trading

• Saving

• Earning

• Valuing

How are risks and rewards related to each other?

• As risk increases, reward increases.

• As risk decreases, reward increases.

• As risk increases, reward is unchanged.

• As risk decreases, reward is unchanged.

A promise to repay borrowed money at a fixed rate of interest in the future is known as which of the following?

• Stock

• Bonds

• Liquidity

• Rewards

Which term describes shares in the ownership of a corporation?

• Value

• Return

• Matrix

• Stocks

An investment that falls in value following an economic downturn has experienced which of the following?

• Liquidity risk

• Inflation risk

• Longevity risk

• Market risk

Which of the following describes a general rise in prices in the economy?

• Stagnation

• Inflation

• Escalation

• Contraction

Which of the following is a retirement savings account established by an individual?

• NMA

• LTA

• IRA

• TIA

Your employer can establish this type of account for your retirement savings.

• 401(k)

• 501(c)

• 301(a)

• 601(g)

This risk describes the possibility of running out of retirement money before you die.

• Liquidity risk

• Inflation risk

• Longevity risk

• Market risk