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Chapter 19 Savings & Investing Strategies

Total questions: 42

Worksheet time: 21mins

Name
Class
Date
1.

Investing means using your savings to earn more money

a)

True

b)

False

2.

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

a)

True

b)

False

3.

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

a)

True

b)

False

4.

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

a)

True

b)

False

5.

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

a)

True

b)

False

6.

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

a)

True

b)

False

7.

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

a)

True

b)

False

8.

Most corporate bonds are issues for $10,000.

a)

True

b)

False

9.

Land and anything attached to it is called real estate.

a)

True

b)

False

10.

An investment with an unusually high risk is called a speculative investment.

a)

True

b)

False

11.

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

a)

1 percent

b)

5 percent

c)

10 percent

d)

25 percent

12.

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

a)

security

b)

interest

c)

collateral

d)

premiums

13.

Money market accounts

a)

pay interest based on various government and corporate securities.

b)

generally require long-term deposits.

c)

usually pay much less than a regular savings account, but are far more secure.

d)

rarely have a large minimum balance requirement.

14.

Which of the following is NOT a commodity?

a)

grain

b)

livestock

c)

gold

d)

real estate

15.

Tasha's main investment concern is that the money she has invested will be returned to her. She is MOST concerned with

a)

taxes

b)

safety

c)

liquidity

d)

return

16.

This type of mutual fund invests in both stocks and bonds.

a)

income fund

b)

balanced fund

c)

sector fund

d)

aggressive-growth fund

17.

Interest is paid to a bondholder based on the bond's

a)

maturity value and stated interest rate

b)

stated interest rate

c)

maturity date and maturity value

d)

annual percentage yield and maturity date

18.

Mortgage payments are

a)

almost always lower than rent payments

b)

generally do not include property taxes and insurance

c)

commonly paid on a weekly basis

d)

usually long-term loans

19.

Janine needs someone to estimate the value of some property for her. She should probably hire a(n)

a)

real estate agent

b)

appraiser

c)

home inspector

d)

real estate attorney

20.

The difference between the price at which you could currently sell your house and the amount owed on the mortgage is called

a)

appreciation

b)

the assessed value

c)

equity

d)

liquidity

21.

The Dow Jones Industrial Average is commonly reported

a)

rate of return

b)

stock index

c)

stated interest rate

d)

net asset value

22.

The current price quoted for precious metals in the world market is called the

a)

yield

b)

discount rate

c)

face value

d)

spot price

23.

The storage of money for future use is called

a)

saving

b)

compound

c)

mutual

d)

yield

24.

___________ interest is computed on the amount saved plus the interest previously earned.

a)

saving

b)

compound

c)

mutual

d)

yield

25.

The ______________ is the percentage of your money earned on your savings or investment over a year.

a)

saving

b)

compound

c)

mutual

d)

yield

26.

In a(n) ______________________ fund, money from many investors is used to invest in a variety of companies, allowing investors to spread out their risk among many investors.

a)

saving

b)

compound

c)

mutual

d)

yield

27.

The ease with which an investment can be changed into cash without loosing its value is called _________________

a)

liquidity

b)

dividends

c)

commission

d)

value

28.

Cash payments a business makes to stockholders are called _________________________

a)

liquidity

b)

dividends

c)

commission

d)

value

29.

For their services, stockbrokers charge a fee called a(n) _________________________

a)

liquidity

b)

dividends

c)

commission

d)

value

30.

The market ________________of a stock is the price at which a share of stock can be bought and cold in the stock market.

a)

liquidity

b)

dividends

c)

commission

d)

value

31.

A _______________ is a certificate representing a promise to pay a definite amount of money at a stated interest rate on a specified due date.

a)

bond

b)

face

c)

income

d)

mortgage

32.

Each bond has a(n) _______________ value, also called the maturity date.

a)

bond

b)

face

c)

income

d)

mortgage

33.

A type of mutual fund called a(n) _________________ fund specializes in stocks that pay regular dividends.

a)

bond

b)

face

c)

income

d)

mortgage

34.

A(n)_____________ is a legal document giving a lender a claim against property if the principal, interest, or both are not paid as agreed.

a)

bond

b)

face

c)

income

d)

mortgage

35.

The amount that your local government determines your property is worth for tax purposes is called the ______________ value

a)

bond

b)

assessed

c)

income

d)

contract

36.

An agreement to buy or sell an amount of commodity at a specified price in the future is a future _______________________

a)

bond

b)

assessed

c)

income

d)

contract

37.

A _____________________ is a licensed specialist in the buying and selling of stocks and bonds.

a)

Stock Broker

b)

Real Estate Agent

c)

Loan Officer

d)

Market Analysis

38.

A ______________________ provides information about securities you may want to buy.

a)

Real Estate Agent

b)

Full-Service Broker

c)

Discount Broker

d)

Loan Agent

39.

A __________________ simply places orders and offers limited research in different stocks.

a)

Real Estate Agent

b)

Full-Service Broker

c)

Discount Broker

d)

Loan Agent

40.

Tax Benefits, Increased Equity and Pride of Ownership are three benefits of

a)

investing

b)

selling

c)

home ownership

d)

renting

41.

Mortgages where the interest rates are set for the term of the loan are called _____________________________

a)

adjustable-rate mortgages (ARM)

b)

lower rates

c)

appraisal fees

d)

fixed-rate mortgages

42.

Mortgages where the interest rate is raised or lowered from time to time depending on the current interest rates are called ______________________

a)

adjustable-rate mortgages (ARM)

b)

lower rates

c)

appraisal fees

d)

fixed-rate mortgages