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WorksheetsFSV VOCAB 08: Investing Intro
Total questions: 19
Worksheet time: 29mins
What is a 401(k) or 403(b) in terms of financial planning?
A retirement savings plan with tax advantages
A type of credit card
A government-funded pension
A personal savings account
Which of the following best defines an 'Asset'?
A resource with economic value and an expectation of future benefit
A legal liability or obligation that is expected to be settled
A financial document or contract
A type of expense incurred by businesses
What is a 'Bond' in investment terms?
An investment vehicle representing a loan made by an investor to a borrower
A type of stock share where the owner gets a loan.
A mutual fund made up of government agencies.
A certificate of deposit
What is the primary purpose of 'Capital' in business?
To cover operational costs such as electricity.
The amount returned to a company's owners.
To expand the business.
To pay taxes
What characterizes 'Debt'?
A financial obligation to repay borrowed money
The amount of money returned to a company's owners.
An asset or item acquired with the goal of increasing in value.
A method of taxation
What does 'Equity' represent in a company?
The amount of money returned to a company's owners if all assets were sold and debt paid back.
The total debts of a company that must be paid back plus interest.
The yearly revenue of a company which determines profit.
The number of employees in a company
What is the goal of acquiring an 'Investment'?
To generate income or increase value
To gain financial security
To save for retirement
All of the above
The Rule of 72 is used to determine _____.
the age a person is eligible for retirement
how long it takes for money to double at a given interest rate
the amount of money that should be put aside for emergencies
a person's federal income tax rate
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.
How is a bond different from a stock?
A bond is a loan you give to an organization while a stock is partial ownership in a company
Bonds are typically riskier than stocks but have the potential to earn higher returns
Bonds are usually issued by smaller startup companies while stocks are issued by well established organizations
Bonds are best for earning high returns while stocks are best for providing a stable source of income
What statement is true about Traditional 401k/IRA and Roth 401(k)/Roth IRA?
Traditional plans provide tax advantages before retirement.
Roth accounts are taxed in retirement.
A (a) is a financial instrument that holds monetary value such as a stock or bond.
Place these retirement savings accounts into their correct category
Roth 401(k)
Roth IRA
403(b)
IRA
401(k)
What is the primary function of a 'Mutual Fund' ?
A private fund managed by individuals without regulatory oversight.
A professionally managed portfolio that pools money together with other investors..
A government-backed investment option for high-risk profiles.
A licensed firm which allows you to buy securities, including stocks, bonds, mutual funds and ETF’S.
How does diversification reduce risk in an investment portfolio?
By investing all funds into a single high-yield stock.
Owning a wide variety of investment types.
By focusing only on bonds.
By increasing investment in international markets only.
A Brokerage Account is
A licensed firm which allows you to buy securities, including stocks, bonds, mutual funds and ETF’S.
A professionally managed portfolio that pools money together with other investors.
A basket of securities including both stocks and bonds which offers diversification and easy trading.
Retirement savings where contributions are taxed, but investment earnings are tax free.
Pools assets like stocks, bonds, money market instruments and other assets structured to meet stated investment objectives.
Mutual fund
ETFs
Full service brokers
Discount brokers
A basket of securities including both stocks and bonds which offers diversification and easy trading.
Financial planning firms
Full broker investment banks
Class A mutual funds
ETF
Match the following
Portfolio
A collection of investments.
Asset
An item expected to have future benefit.
Stock
Ownership in a company.
Diversification
Strategy to reduce risk, maximize return
Bond
Loan given to a company.
