Chapter 19 Retake-4th period

Investing means using your savings to earn more money.

• True

• False

The more frequently interest is compounded, the slower the growth in savings.

• True

• False

If a stock increases in value and is then sold for more than its original cost, a capital gain results.

• True

• False

Usually, higher risk investments pay higher yields than lower risk investments.

• True

• False

Before a corporation can pay bondholders the rate of interest promised to them, it must first pay dividends to stockholders.

• True

• False

Investors who do their own research can save money by using a full-service broker.

• True

• False

Stocks of smaller companies are usually not traded on a stock exchange.

• True

• False

Most corporate bonds are issued for $10,000.

• True

• False

Financial planning experts encourage people to deposit ________ of their income into a savings account or other investment each month.

• 1 percent

• 5 percent

• 10 percent

• 25 percent

The money you receive for letting others use your money is called

• security

• interest

• collateral

• premiums