PF Unit Three Review

There will be a penalty for withdrawing your money before reaching the maturity date of a CD (certificate of deposit).

• True

• False

ROI stands for Refunds on Investment

• True

• False

When it comes to investing in general, the greater the risk, the greater the potential return.

• True

• False

An investment with a tax deferral means it is not subject to taxation at all.

• True

• False

This type of risk is the chance the rate of inflation will rise faster than the rate of return on your investment.

• Inflation Risk

• Market Risk

• Industry Risk

If Bill bought an investment for $500 on June 1 and sold it for $600 on November 1, what was his annual return on investment (ROI)? Give your answer as a decimal  (ex. 15% would be 0.15). 

• .48

• .15

• $100

• 100%

This animal represents a prolonged period of rising stock prices and general feeling of investor optimism

• Pig

• Bull

• Bear

• Duck

This animal represents a prolonged period of decreasing stock prices and general feeling of investor pessimism

• Duck

• Bull

• Bear

• Pig

The collection of investments you have is also known as a(n)...

• Investment Band

• Investment Portfolio

• Stock Option

This type of individual retirement account (IRA) allows investors to contribute funds pre tax. However, they will later pay taxes on the overall earnings of the fund. 

• Traditional IRA

• Roth IRA

• 401(k)