Chapter 12 review

What is The Fifth Foundation?

• Pay cash for your home

• Build wealth and give.

• Save for retirement.

• Pay cash for college.

A security that represents part ownership of a company is called a(n) __________.

• Stock

• Bond

• Certificate of Deposit

• Annuity

When you invest in a mutual fund, you are contributing to a pool of money that will be . . .

• Given to hundreds of local charities in your area

• Invested in a mix of stocks, bonds and money market accounts

• Taxed based on each individual investor's annual salary

• Put into a separate savings account for your children to inherit someday

Diversification reduces your __________ by using a mix of investment types in your portfolio.

• Income

• Retirement funds

• Risk

• Mutual funds

__________ is the process of figuring out how much money you'll need in retirement and creating a plan to get there.

• Investment banking

• Outrageous generosity

• Retirement planning

• Retirement accounting

Investing your money earns you more money because of . . .

• Checking accounts

• Mortgage payments

• Compound growth

• Short-term savings

When riding the highs and lows of the stock market, remember . . .

• You can't go wrong when investing money into stocks.

• The S&P isn't a reliable source when it comes to navigating the growth and decline of stocks.

• It's unpredictable and risky. You should pull your money out and steer clear.

• It will level out, so stick with it!

Roth IRA, 401(k), 403(b), 457, and Simplified Employee Pension are all examples of ___.

• Tax forms

• Retirement plans

• Mutual funds

• Investment bankers

When you invest, your goal is to earn a negative rate of return on investment.

• True

• False

Certificates of deposit and money market accounts are both examples of investments with ___ risk and ___ return.

• Low; high

• Low; low

• High; high

• High; low