WorksheetsPF Unit 3 Test
Total questions: 47
Worksheet time: 26mins
Name
Class
Date
1.
Where should your funds be held for immediate needs?
a)
Checking Accounts
b)
Savings/CD's/Money Market Accounts
c)
Investment Accounts
2.
Where should your funds be held for intermediate term needs? < 3 years
a)
Checking Accounts
b)
Savings/CD's/Money Market Accounts
c)
Investment Accounts
3.
Where should your funds be held for long term needs? > 3 years
a)
Checking Accounts
b)
Savings/CD's/Money Market Accounts
c)
Investment Accounts
4.
Initial amount of money borrowed or deposited.
a)
Principal
b)
Interest
c)
APY
d)
Fees
5.
Money earned from savings or additional money paid from borrowing
a)
Principal
b)
Interest
c)
APY
d)
Fees
6.
Actual interest rate on a yearly basis with compounding included
a)
Principal
b)
Interest
c)
APY
d)
Fees
7.
Additional charges for activities added to balances
a)
Principal
b)
Interest
c)
APY
d)
Fees
8.
Savings option with high liquidity, lowest risk, lowest return
a)
Savings account
b)
Money Market Account
c)
CD
d)
Government Bond
9.
Savings option with more competitive interest rates and no penalties for early withdrawal
a)
Savings account
b)
Money Market Account
c)
CD
d)
Government Bond
10.
Savings option with penalties for withdrawal prior to maturity date.
a)
Savings account
b)
Money Market Account
c)
CD
d)
Government Bond
11.
Savings option that may lose value with interest rate changes if sold early.
a)
Savings account
b)
Money Market Account
c)
CD
d)
Government Bond
12.
Investing
a)
The chance an investment's value will decrease
b)
Use of long-term savings to earn a financial return
c)
A rise in the general level of prices.
d)
Spreading of risk among many types of investments
e)
The entirerty of all your investments
13.
Inflation
a)
The chance an investment's value will decrease
b)
Use of long-term savings to earn a financial return
c)
A rise in the general level of prices.
d)
Spreading of risk among many types of investments
e)
The entirerty of all your investments
14.
Diversification
a)
The chance an investment's value will decrease
b)
Use of long-term savings to earn a financial return
c)
A rise in the general level of prices.
d)
Spreading of risk among many types of investments
e)
The entirerty of all your investments
15.
Portfolio
a)
The chance an investment's value will decrease
b)
Use of long-term savings to earn a financial return
c)
A rise in the general level of prices.
d)
Spreading of risk among many types of investments
e)
The entirerty of all your investments
16.
Investing Risk
a)
The chance an investment's value will decrease
b)
Use of long-term savings to earn a financial return
c)
A rise in the general level of prices.
d)
Spreading of risk among many types of investments
e)
The entirerty of all your investments
17.
Stock
a)
Exempt from state and local tax, governmnet bonds with a set maturity date
b)
Collection of investment securites that can be bought and sold like an individual stock.
c)
Pooling of funds from many investors to buy a large selection of securities. Can only be bought/sold at end of the day.
d)
Debt of a coportaion or government that is sold to investors.
e)
Unit of ownership in a corporation
18.
Bond
a)
Exempt from state and local tax, governmnet bonds with a set maturity date
b)
Collection of investment securites that can be bought and sold like an individual stock.
c)
Pooling of funds from many investors to buy a large selection of securities. Can only be bought/sold at end of the day.
d)
Debt of a coportaion or government that is sold to investors.
e)
Unit of ownership in a corporation
19.
Mutual Fund
a)
Exempt from state and local tax, governmnet bonds with a set maturity date
b)
Collection of investment securites that can be bought and sold like an individual stock.
c)
Pooling of funds from many investors to buy a large selection of securities. Can only be bought/sold at end of the day.
d)
Debt of a coportaion or government that is sold to investors.
e)
Unit of ownership in a corporation
20.
ETF
a)
Exempt from state and local tax, governmnet bonds with a set maturity date
b)
Collection of investment securites that can be bought and sold like an individual stock.
c)
Pooling of funds from many investors to buy a large selection of securities. Can only be bought/sold at end of the day.
d)
Debt of a coportaion or government that is sold to investors.
e)
Unit of ownership in a corporation
21.
Treasury Securities
a)
Exempt from state and local tax, governmnet bonds with a set maturity date
b)
Collection of investment securites that can be bought and sold like an individual stock.
c)
Pooling of funds from many investors to buy a large selection of securities. Can only be bought/sold at end of the day.
d)
Debt of a coportaion or government that is sold to investors.
e)
Unit of ownership in a corporation
22.
People who own shares of stock
a)
Stock holders
b)
Dividends
c)
Value Stocks
d)
Growth Stocks
23.
Money paid to shareholders
a)
Stock holders
b)
Dividends
c)
Value Stocks
d)
Growth Stocks
24.
Companis with solid fundamentals that are priced below those of its peers, based on analysis of price/earnings ratio, yield, and other factors.
a)
Stock holders
b)
Dividends
c)
Value Stocks
d)
Growth Stocks
25.
Companies that tends to increase in capital value rather than yield high income.
a)
Stock holders
b)
Dividends
c)
Value Stocks
d)
Growth Stocks
26.
Bull market
a)
Prolonged period fo rising stock prices
b)
Prolonged period of falling stock prices
c)
Use of borrowed money to buy securities.
d)
Selling a stock borrowed from a broker that must be replaced later.
e)
Using dividends to automaticly buy more shares of the company.
27.
Bear market
a)
Prolonged period fo rising stock prices
b)
Prolonged period of falling stock prices
c)
Use of borrowed money to buy securities.
d)
Selling a stock borrowed from a broker that must be replaced later.
e)
Using dividends to automaticly buy more shares of the company.
28.
Leaverage
a)
Prolonged period fo rising stock prices
b)
Prolonged period of falling stock prices
c)
Use of borrowed money to buy securities.
d)
Selling a stock borrowed from a broker that must be replaced later.
e)
Using dividends to automaticly buy more shares of the company.
29.
Short Selling
a)
Prolonged period fo rising stock prices
b)
Prolonged period of falling stock prices
c)
Use of borrowed money to buy securities.
d)
Selling a stock borrowed from a broker that must be replaced later.
e)
Using dividends to automaticly buy more shares of the company.
30.
Divident Reinvestment
a)
Prolonged period fo rising stock prices
b)
Prolonged period of falling stock prices
c)
Use of borrowed money to buy securities.
d)
Selling a stock borrowed from a broker that must be replaced later.
e)
Using dividends to automaticly buy more shares of the company.
31.
Agency Bond
a)
Federal government debt issued by an agency
b)
Issued by state and local government, interest is federal tax exempt.
c)
Bonds issued by companies. Interest ONLY is paid perodicly. Principal is paid at bond maturity.
d)
Up
e)
Down
32.
Municipal Bond
a)
Federal government debt issued by an agency
b)
Issued by state and local government, interest is federal tax exempt.
c)
Bonds issued by companies. Interest ONLY is paid perodicly. Principal is paid at bond maturity.
d)
Up
e)
Down
33.
Coporate Bond
a)
Federal government debt issued by an agency
b)
Issued by state and local government, interest is federal tax exempt.
c)
Bonds issued by companies. Interest ONLY is paid perodicly. Principal is paid at bond maturity.
d)
Up
e)
Down
34.
As interest rates go up, bond prices go ____________
a)
Federal government debt issued by an agency
b)
Issued by state and local government, interest is federal tax exempt.
c)
Bonds issued by companies. Interest ONLY is paid perodicly. Principal is paid at bond maturity.
d)
Up
e)
Down
35.
Government Bonds
a)
Lowest Risk, Lowest Return
b)
Low risk, Low reward
c)
Higer risk, Higher reward
36.
Investment Grade Bonds
a)
Lowest Risk, Lowest Return
b)
Low risk, Low reward
c)
Higer risk, Higher reward
37.
Junk Bonds
a)
Lowest Risk, Lowest Return
b)
Low risk, Low reward
c)
Higer risk, Higher reward
38.
Index Funds
a)
Track a know asset group, usually low cost,
b)
Invests in companies that tends to increase in capital value rather than yield high income.
c)
Investes in companis with solid fundamentals that are priced below those of its peers, based on analysis of price/earnings ratio, yield, and other factors.
d)
Invest in safe liquid secrurities
e)
Have higher expense ratios and usuall cannot outperform the market for extended periods of time.
39.
Growth Funds
a)
Track a know asset group, usually low cost,
b)
Invests in companies that tends to increase in capital value rather than yield high income.
c)
Investes in companis with solid fundamentals that are priced below those of its peers, based on analysis of price/earnings ratio, yield, and other factors.
d)
Invest in safe liquid secrurities
e)
Have higher expense ratios and usuall cannot outperform the market for extended periods of time.
40.
Value Funds
a)
Track a know asset group, usually low cost,
b)
Invests in companies that tends to increase in capital value rather than yield high income.
c)
Investes in companis with solid fundamentals that are priced below those of its peers, based on analysis of price/earnings ratio, yield, and other factors.
d)
Invest in safe liquid secrurities
e)
Have higher expense ratios and usuall cannot outperform the market for extended periods of time.
41.
Money Market Fund
a)
Track a know asset group, usually low cost,
b)
Invests in companies that tends to increase in capital value rather than yield high income.
c)
Investes in companis with solid fundamentals that are priced below those of its peers, based on analysis of price/earnings ratio, yield, and other factors.
d)
Invest in safe liquid secrurities
e)
Have higher expense ratios and usuall cannot outperform the market for extended periods of time.
42.
Activly Managed Fund
a)
Track a know asset group, usually low cost,
b)
Invests in companies that tends to increase in capital value rather than yield high income.
c)
Investes in companis with solid fundamentals that are priced below those of its peers, based on analysis of price/earnings ratio, yield, and other factors.
d)
Invest in safe liquid secrurities
e)
Have higher expense ratios and usuall cannot outperform the market for extended periods of time.
43.
IRA mark all that apply
a)
Taxes paid when money is contributed
b)
Taxex paid when money is withdrawen
c)
Set up with employeer
d)
Set up independtly
e)
Usually has MATCHING
44.
Roth IRA mark all that apply
a)
Taxes paid when money is contributed
b)
Taxex paid when money is withdrawen
c)
Set up with employeer
d)
Set up independtly
e)
Usually has MATCHING
45.
401k/403b mark all that apply
a)
Taxes paid when money is contributed
b)
Taxex paid when money is withdrawen
c)
Set up with employeer
d)
Set up independtly
e)
Usually has MATCHING
46.
Matching as it pertains to this class. Mark all that apply
a)
Wearing the same outfit as your friends
b)
The most important thing Mr. Wolf wants you to remember from this class
c)
The best return on investment you can get
d)
Money your employer contributes to your retirement account.
47.
Reflect on the Investment Policy Statements and the three Investment Philosophy comparisons (Index-Only, Target Date, and Asset Allocation) we have evaluated.
Imagine you are 22 years old, starting your first professional job, and have budgeted $500 per month for retirement. Write a reasoned investment plan addressing the following:
Account Prioritization: Where will your $500 go first, second, and third? (Consider the "order of operations" involving Employer 401(k) matches, Roth IRAs, and Traditional Brokerage accounts). Justify your sequence.
Strategy Selection: Which of the three philosophies aligns best with your personal risk tolerance and "hands-on" vs. "hands-off" preference?
Specific Asset Allocation: Based on your chosen strategy, describe exactly how your money will be divided:
Index Funds: What is your percentage split between SPY, QQQ, and DIA?
Target Date Fund: Which specific year would you select and why?
Asset Allocation: Would you choose a Growth (AOA) or Balanced (AOR) approach?
Behavioral Commitment: Identify one market event (e.g., a 20% crash) and explain how your chosen philosophy helps you stay disciplined during that time.
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