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Financial Terms and Definitions - 25 Terms

Total questions: 24

Worksheet time: 12mins

Name
Class
Date
1.

An asset or item that is acquired with the goal of making a profit is called a/an:

a)

investment

b)

liability

c)

expense

d)

revenue

2.

The market value of a company's outstanding shares is calculated by multiplying the current share price by the number of shares outstanding. What is this value called?

a)

Market Capitalization

b)

Net Worth

c)

Book Value

d)

Revenue

3.

An application that allows users to regularly save small sums of money is called a:

a)

Budget Tracker

b)

Savings App

c)

Expense Manager

d)

Investment Platform

4.

A bond, often having tax advantages for individual investors, issued by a state or local government which typically uses the loan to pay for public works to benefit its citizens is called a:

a)

Corporate bond

b)

Municipal bond

c)

Treasury bond

d)

Savings bond

5.

A collection of stocks and/or bonds combined into one fund which will be traded as a unit, typically chosen and actively managed by an 'expert' in exchange for a fee from each investor is called:

a)

Mutual Fund

b)

Stock Portfolio

c)

Bond Index

d)

Exchange-Traded Fund

6.

The second largest stock exchange in the world behind the NYSE is:

a)

NASDAQ

b)

London Stock Exchange

c)

Shanghai Stock Exchange

d)

Tokyo Stock Exchange

7.

The world's largest stock exchange, physically located in New York City, is:

a)

NASDAQ

b)

New York Stock Exchange

c)

London Stock Exchange

d)

Tokyo Stock Exchange

8.

The rate of return that does not account for inflation or taxes is called:

a)

Nominal rate of return

b)

Real rate of return

c)

Effective rate of return

d)

After-tax rate of return

9.

What is a long-term strategy for building wealth by buying investments - typically index funds - and holding them for many years to minimize trading and costs?

a)

Day trading

b)

Swing trading

c)

Buy and hold investing

d)

Short selling

10.

A retirement account, offered in some job sectors or companies, that an employer maintains to give an employee a fixed payout at retirement is called a:

a)

401(k) plan

b)

Pension plan

c)

Roth IRA

d)

Savings account

11.

A collection of financial investments like stocks, bonds, commodities, cash, and cash equivalents, including mutual funds and ETFs is called a:

a)

Portfolio

b)

Investment Fund

c)

Stock Market

d)

Savings Account

12.

The number of goods and services that money can buy, which can weaken in time due to inflation, is known as:

a)

Purchasing Power

b)

Interest Rate

c)

Gross Domestic Product

d)

Exchange Rate

13.

The ratio of money gained or lost on an investment relative to the amount of money invested is known as:

a)

Net Profit

b)

Return on Investment (ROI)

c)

Gross Margin

d)

Net Worth

14.

The rate of return that accounts for inflation and taxes is called _______.

a)

real rate of return

b)

nominal rate of return

c)

gross rate of return

d)

net rate of return

15.

The degree of uncertainty on how likely the investor is to make money on an investment is known as _______.

a)

risk

b)

profit

c)

interest

d)

dividend

16.

An online wealth management service that provides automated, algorithm-based portfolio management advice without the use of human financial planners is called a _______.

a)

Robo-advisor

b)

Financial Consultant

c)

Investment Broker

d)

Human Advisor

17.

An individual retirement account that allows a person to set aside after-tax income up to a specified amount each year is known as a _______.

a)

Roth IRA

b)

Traditional IRA

c)

401(k)

d)

SEP IRA

18.

A person, company, or institution that owns at least one share in a company is called a _______.

a)

shareholder

b)

debtor

c)

employee

d)

manager

19.

A financial asset, such as a stock or a bond, that can be bought and sold in a financial market is known as a _______.

a)

security

b)

commodity

c)

currency

d)

derivative

20.

An index of 500 large cap companies chosen based on their size, industry, and other factors, used to represent the entire market is called the _______.

a)

S&P 500

b)

Dow Jones Industrial Average

c)

NASDAQ Composite

d)

Russell 2000

21.

A federal program that provides monthly benefits to millions of Americans, including retirees, military families, surviving families of deceased workers, and disabled individuals is known as _______.

a)

Social Security

b)

Medicare

c)

Unemployment Insurance

d)

Medicaid

22.

A share of the value of a company, which can be bought, sold, or traded as an investment and which gives the investor small partial ownership of the company is called a _______.

a)

share

b)

bond

c)

loan

d)

deposit

23.

A market where shares in corporations are bought and sold through an organized system is known as a _______.

a)

stock market

b)

commodity market

c)

real estate market

d)

currency market

24.

A bond, generally considered to be a risk-free investment, issued by the U.S. Treasury with a maturity of more than 10 years is called a _______.

a)

long-term Treasury bond

b)

short-term Treasury bill

c)

municipal bond

d)

corporate bond