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WorksheetsChapter 8 Test - Dave Ramsey
Total questions: 40
Worksheet time: 3hrs 20mins
Long-term investments, properly diversified, include the following mutual funds:
Growth, balanced, international, bond
Growth, growth and income, international, aggressive growth
International, bond, aggressive growth, growth
Growth, growth and income, bond, aggressive growth
Which of the following is a good investment option?
Gold
Viaticals
Mutual Funds
Futures
Which statement is true about liquidity?
The more liquid an investment, the more return
The less liquid the investment, the less return
The more liquid an investment, the less return
Both A and B
A reason that people need to save and invest is to:
Enable their money to make money
Increase the money supply
Be able to get anything they want
Have an opportunity to talk with financial service providers
Company X's board of directors has decided to issue a portion of its earnings to its shareholders. If you own stock in Company X, you can expect to receive a(n):
Investment
Dividend
Buy-out
Yield
Savings accounts and money-market accounts are most appropriate for:
Long-term investments like retirement
Earning a high rate of return
Emergency funds and short-term goals
Savings accounts and money-market accounts should be avoided since they carry high risk
The benefit of diversification in your investment is:
Reduced risk
Increased return
Reduced tax liability
Increased risk
To ensure that some of your retirement savings will no be subject to income tax upon withdrawal you would contribute to:
A 401(k)
A Roth IRA
An annuity
A traditional IRA
A young investor willing to take moderate risk for above-average growth would be most interested in:
Single stocks
Bonds
Mutual Funds
Real estate
In some cases, employers will match the employee contribution, but you should fund your plan whether your company matches or not. This statement refers to:
Single stocks
Roth IRA
Bond funds
401(k)
A retirement plan found in non-profit organizations such as churches, hospitals and schools.
GIC
457
401(k)
403(b)
Which of the following statements about the stock market is false?
The terms bull market and bear market describe upward and downward market trends.
The stock market is a generic term that encompasses the trading of securities.
The Dow Jones Industrial Average is one measure of the stock market.
Formed in 1792, the New York Stock Exchange (NYSE) is the smallest organized stock exchange in the United States.
When buying and selling investments, you should not:
Switch your investment strategy often, based on market conditions
Understand basic investment strategies and identify ones that will help you reach your goals
Set your investment goals and consider a time frame
Learn the different types of investments
Employee benefits packages:
Should not be a consideration when looking for a job
Never include retirement plans
Are the same regardless of the company you work for
Are non-wage compensations provided to employees in addition to their normal wages or salaries
A savings account sold by an insurance company, designed to provide payments to the holder at specified intervals, usually after retirement.
Money Market
Mutual fund
Single stock
Annuity
Money markets are great for your emergency fund due to their liquidity and stability.
True
False
The purpose of war bonds is to finance military operations during war time. The last time the United States issued war bonds was during the Vietnam War.
True
False
A mutual fund portfolio that is properly diversified will have all investment dollars located in just one of four different classes of financial assets.
True
False
Single stocks and mutual funds carry the same amount of risk.
True
False
You can start investing with a small amount of money.
True
False
Good investment portfolios are extremely complex.
True
False
You should start investing as soon as you have your college education funded.
True
False
If you leave a job and have money saved in your employer's retirement plan, always roll that money into an IRA using a direct rollover, which allows you to avoid taxes and penalties.
True
False
If you get into financial trouble, borrowing against your retirement plan is a good option.
True
False
Saving and investing have nothing to do with the amount of money you make.
True
False
Quality of an asset that permits it to be converted quickly into cash without loss of value; availability of money.
Risk
Liquidity
Relationship of substantial reward compared to the amount of risk taken.
Risk-return ratio
Investment strategy
A list of your investments.
Bank Statement
Portfolio
Piece of ownership in a company, mutual fund or other investment.
401(k)
Share
Securities that represent part ownership or equity in a corporation.
Stocks
Bonds
Money that is invested, either tax deferred or tax free, within a retirement plan.
Tax-favored dollars
Dividend
The government agency responsible for regulating the stock market.
Federal Reserve
Securities Exchange Commission
Federal agency responsible for collecting taxes and for the interpretation and enforcement of the Internal Revenue Code.
Internal Revenue Service
Federal Deposit Insurance Corporation
Distribution of a portion of a company's earnings, decided by the board of directors, to a class of its shareholders.
Interest
Dividend
A savings plan operated by a state or educational institution designed to help families set aside funds for future college costs.
529 Plan
Guaranteed Investment Contract
You should never invest using borrowed money because ...
it increases the risk of investment.
Dave Ramsey said not to.
it's not really your own.
Compound interest ...
guarantees future wealth.
is a good investment.
is interest paid on interest previously earned.
The Rule of 72 is calculated by ...
multiplying 72 by the number of years it takes to double your investment.
dividing 72 by the expected interest rate.
None of the above
Why do single stocks carry a high degree of risk?
There is no diversification in your investment.
The entire investment process carries a high degree of risk.
None of the above
Why is real estate not a liquid investment?
You can't put a "Liquidation Sale" sign in the yard.
It cannot be quickly converted to cash.
None of the above
