WorksheetsUnit 6 Saving & Investment!!!
Total questions: 65
Worksheet time: 33mins
The practice of spreading your investments around in different types of assests.
Investification
Diversionizing
Diversification
Division
A type of investment account that helps you save/grow money for college?
401k
College Account
ESP
529
A retirement plan where the investors chooses retirement date to decide when and how to invest.
Retirement Fund Account
529 Account
Target Date Fund
403b
What is a typical saving account interest rate?
0.5 to 2%
10%
25%
5 to 7%
What is a typical interest rate for an index or mutual fund?
7%
10%
25%
1%
How do you contribute to your future social security benefits?
Savings account contributions
Through payroll taxes
When you file tax returns
Through checking account withdrawals
What is an asset?
a random collection of useless things
the wrong answer
a set of items you count
a resource with economic value
A retirement plan offered by an employer who matches your contributions.
401K
403b
529
Social Security
An investment where you buy shares in a company and hope it grows in value.
IRAs
stocks
index funds
bonds
Tax free investment plan you set up on your own for retirement.
529
Mutual Fund
IRA Individual Retirement Fund
401k
When an investor lends money to government or business and get paid back with interest.
stocks
401k
savings account
bonds
When should you start investing?
Never its all going to work out
When your credit score is high enough
As soon as possible
A few years before retirment
A distribution of a companies earnings to its shareholders.
dividend
check
percentage
profit
Type of IRA account is best for someone young with a lower income and doesn't pay taxes at withdrawal?
403b
SEP IRA
Roth IRA
Traditional IRA
Employees of private for profit companies may participate in which of the following?
457
401k
737
403b
At what age can you withdraw money from either your 401k, IRA, or 403b and not pay a penalty?
65
60 1/2
59 1/2
62
What is the least amount you should contribute to a 401k?
What ever your employer will match
What ever you can afford
20% of your paycheck
no correct answer
Employees of tax exempt or non profit organizations such as teacherss may join these
403b
1040a
737c
401k
Type of IRA where the contributions are taxed but not the profits you withdraw at the end.
Roth IRA
457
403b
Traditional IRA
Contributions to a 401k or 403b may be completed by automatic payroll deduction.
True
False
You must begin withdrawals from tax deferred savings plans at this age.
75
65
70 1/2
59 1/2
What is the number one factor in accruing a sufficient amount in your 401k?
Interest Rate
Job type
Time
Size of contributions
What is the maximum amount of your income a person may contribute to a 401k?
$16,000
6,000
22,500
$12,000
An emergency fund should be
3 to 6 months
1 to 2 years
3 to 6 years
1 to 2 months
Money tucked away in a safe, low-interest account for near-term goals/smaller purchases.
Interest
Spending basket
Investment
Savings
This grows with Interest on the interest
Savings principal
Compound Interest
Principal Interest
Simple Interest
What is a good use of your emergency fund?
Splurge a little during the holidays
Buy new clohes for schoolt
Pay for surprise medical costs
Pay for that new surfboard
To help you save for the future its best to ____________________ each month.
Spend first then save
Pay your self first
Pay yourself later
Splurge only twice a week
Who protects bank customer's deposits up to $250,000?
FDIC
FCC
FDA
SEC
A tax exempt savings plan for college that you definitely should start if have children one day.
529
1989
403b
401K
Savings account that offers a higher interest rate and the ability to spend money on purchases in case of emergencies.
Certificate of Deposit
Money Market Account
Online Savings Account
Traditional Savings Account
What generates returns or allows money to grow faster than inflation?
Investment
Budgeting
Spending
Saving
Who regulates and monitors the stock exchange in the US?
FDA
FCC
SEC
FDIC
Interest on the original principal only.
Compound Interest
Original Interest
Simply Interesting
Simple Interest
Savings plan offered by banks where you agree not to touch that money for a certain period of time for a higher interest
Certificate of Deposit
Definitive investment
Prolonged savings
Deposit of Investment
How much should you save and invest from your income each month?
50
30
20
100
How much of your monthly after-tax income should be used for housing/fixed/essential/needs expenses?
30
20
50
100
This formula will help you estimate how long it will take your investment to double?
Quadratic Formula
Compound Formulat
Rule of 72
Rule of 50
A bond is
a form of lending to a company or government
a group of similar stocks
a restriction
a promise
Dividend
a group of simiar stocks and bonds
a number to be divided by itself to figure the profit
the share of profits distributed in cash
a share of stock investors own
Stockholder or shareholder
price that the shares will be held at until they are sold
the owner of a stock
when companies combine or share their assests
the current price that will be shared on the stock exchange
A stock is
a form of lending money to a company or business
the price investors are willing to pay to own the company
when several companies combine the funds of many investors
a share of ownership in a company
An Index Fund is
indicates the possibility that an investment will fail
an easy way to calulate the futre value of an investment
A group of similar stocks & bonds, ie energy
the purchase of assest to make a profit
Investing is
is used to grow an emergency fund
purchasing assests with the goal of increasing future income
used to create a guaranteed rate of return
spending time and money creating a new stream of income
It is a good idea to start saving for retirement when you are in your...
30s
50s
40s
20s
IRA stands for
Imminent Relative Assisstance
Individual Retirement Account
Intelligence Related Activity
Important Risk Analysis
An Individual Retirement Account (IRA) is
provides the owner with investment options
all of the above
penalized for early withdrawal
limited to $6,000 annual contributions
What is a general rule of thumb on how much you should save?
10% of your income
30% of your income
20% of your income
5% of your income
Which is TRUE about online saving accounts?
Usually have higher costs compared to brick-and-mortar banks
You can withdraw money an unlimited # of times
Online accounts are not FDIC insured
Usually have higher interest rates than non-online accounts
How does diversification help in investment?
By allocating investments among various asset types to reduce risk
By focusing solely on bonds
By investing only in domestic markets
By guaranteeing profits
Which statement best describes how diversification impacts risk when you are investing?
Diversification means spreading your money across multiple investments, which decreases risk.
Diversification means spreading your money across multiple investments, which increases risk.
Diversification means putting all of your money into one investment, which decreases risk.
Diversification means putting all of your money into one investment, which increases risk.
Why might an investor choose a mutual fund over individual stocks?
Mutual funds offer guaranteed profits
Mutual funds are less risky due to diversification
Mutual funds do not require management
Mutual funds always outperform the stock market
What is a mutual fund?
A type of savings account
A loan from the bank
A pool of money collected from many investors to invest in securities
A government bond
Dahlia is 24 years old. She makes $85,000 per year, has a fully funded Emergency Fund, and extra income each month. What should be her investor risk level?
Conservative
Moderate
Aggressive
Average
What is a 401k?
A retirement account set up through your employer.
A savings account for emergencies.
A tax-exempt fund for higher education.
A piggy bank fund
What is the difference between a 401k and Roth IRA?
A 401k's contributions are not taxed until you withdraw them at retirement. A Roth IRA's contributions have already been taxed
A Roth IRA's contributions are not taxed until you withdraw them at retirement. A 401k's contributions are taxed when you invest them in.
Retirement planning should ideally begin...
a few years before retirement
when all debts are paid off
when kids go off to college
when the first paycheck is received
What does it mean to buy a share of stock in a company?
Lending money to the company.
Owning a portion of the company.
Owning the company's products.
Borrowing money from the company.
What is a stock market?
A place where groceries are sold.
A platform for the exchange of services.
A venue where stocks and bonds are traded.
A website for buying and selling cars.
What are some reasons for why so many Americans live paycheck-to-paycheck?
Many people only buy what they NEED, not what they WANT
Many people spend within their budget
Many people impulse shop
Many people are paying themselves first and then spending
How does the 50-20-30 rule distribute your income?
50% expenses, 20% saving, 30% flexible spending
50% saving, 20% flexible spending, 30% expenses
50% flexible spending, 20% saving, 30% expenses
50% expenses, 20% flexible spending, 30% saving
Assuming a rate of growth of 8%, in how many years will your $ double?
6 years
12 years
9 years
3 years
A Bear market would be considered as?
Optimistic
Pessimistic
Uncertain
Passive
