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WorksheetsResource Management - Chapter 13 - Investments
Total questions: 100
Worksheet time: 50mins
What is the term for this definition?
Executor
Beneficiary
Trustee
Administrator
What is the term for this definition?
Beneficiary
Grantor
Trustee
Executor
Person who dies without a valid will is to die _____
Intestate
Testate
Probate
Executor
Legal amendment (changes) to a will is called a _____
Codicil
Affidavit
Probate
Testament
Legal arrangement that can serve as an alternative to a will is called a _____
Living Trust
Power of Attorney
Probate Court
Testamentary Letter
Someone who holds and manages assets for someone else is called a _____
Trustee
Beneficiary
Debtor
Grantor
Legal process involved in filing a will is called _____
Probate
Litigation
Arbitration
Execution
A legal document assigning someone the right to act on a person's behalf is called _____
Durable Power of Attorney
Living Will
Trust Deed
Last Will and Testament
Legal document that outlines a person's wishes for medical treatment under specific circumstances is called a _____
Living Will
Power of Attorney
Health Insurance Policy
Medical Consent Form
Means putting money to work so that it makes even more money for you over time. What is the term for this definition?
Investing
Spending
Saving
Borrowing
Income that an investment produces is called _____
Return
Expense
Debt
Asset
Ease of which assets can be converted to cash is called _____
Liquidity
Solvency
Profitability
Leverage
Degree to which an investment's return or value may change is called _____
Volatility
Liquidity
Profitability
Stability
Possibility of variation in the return on your investment is called _____
Risk
Profit
Interest
Guarantee
Investments that are lower risk but receive lower returns are called _____
Conservative Investments
Aggressive Investments
Speculative Investments
Growth Investments
What is the term for the money received from investments?
Income
Expense
Debt
Loan
What is the term for an increase in value of an investment over time?
Growth
Depreciation
Stagnation
Loss
What is the term for strategies to reduce the amount of tax paid on investments?
Tax Reduction Strategies for Investing
Investment Risk Management
Portfolio Diversification Techniques
Asset Allocation Methods
What is the term for the amount of money you can afford to invest?
Amount you can afford
Interest rate
Loan amount
Credit score
What is the term for the schedule or period over which you plan to invest?
Timeline
Dividend
Liquidity
Asset
What is the term for the aims you want to achieve with your investments?
Goals
Risks
Returns
Assets
What are the three objectives for investing?
Return, Liquidity, Volatility
Growth, Security, Inflation
Profit, Risk, Taxation
Income, Diversification, Debt
What are the four basic characteristics to evaluating investments?
Return, Liquidity, Volatility, Risk
Return, Growth, Stability, Profit
Liquidity, Profit, Growth, Safety
Risk, Return, Profit, Stability
What is the term for identifying what you want to achieve with your investments?
Identify your Objectives
Calculate your Returns
Diversify your Portfolio
Monitor Market Trends
What is the term for focusing on a plan to achieve your investment goals?
Focus on a Strategy
Ignoring the Market
Chasing Trends
Random Investing
Impulse Buying
What are the three principles of investing?
Diversity your Investments, Portfolio, Asset Allocation
Spend all your money, Avoid saving, Ignore risks
Invest in only one stock, Avoid research, Follow rumors
Never review your investments, Avoid professional advice, Focus on short-term gains
What is the term for a collection of investments that is diversified and well balanced?
Portfolio
Dividend
Bond
Liability
What is the term for the percentage of your portfolio for each type of investment?
Asset Allocation
Market Timing
Risk Tolerance
Dividend Yield
What is the term for sources that provide trustworthy information about investments?
Reliable Media Sources
Unverified Blogs
Rumor Forums
Speculative Chatrooms
What is the term for classes that teach financial planning?
Courses in Financial Planning
Physical Education Classes
Art Appreciation Courses
History Seminars
What is the term for groups of people who meet regularly to learn about investing and to make investments together?
Investment Clubs
Savings Circles
Stock Pools
Finance Forums
What is the term for investment groups that help people with investment planning?
National Association of Investors Corporation (NAIC)
Federal Reserve Board (FRB)
Securities and Exchange Commission (SEC)
Internal Revenue Service (IRS)
What is the term for financial institutions that help people manage their money and investments?
Banks
Supermarkets
Libraries
Hospitals
What is the term for firms that help people buy and sell investments?
Brokerage Firms
Insurance Companies
Credit Unions
Retail Stores
What are Independent Financial Planners?
Professional Advisers for Investments
Bank Loan Officers
Real Estate Agents
Insurance Underwriters
Social Security Retirement Benefits (SS) are administered by which entity?
The federal government
State government
Private insurance companies
Local municipalities
Social Security Retirement Benefits (SS) are funded through a tax paid by which group?
Citizens who are currently working
Retired citizens
Children under 18
Non-citizens living abroad
Name three things that affect the amount of money received from Social Security.
How long you work, Amount earned, Age you apply
Your favorite color, Number of pets, Height
Type of car you drive, Shoe size, Favorite food
Day of the week, Birthstone, Eye color
At what age can you apply for Social Security without penalty?
67 1/2
62
65
70
What is a Pension Plan?
Retirement plan offered to a company's employees
A type of health insurance
A savings account for children
A loan provided by banks
What is a Defined-benefit Plan?
Employer assumes all risk; employer pays retiring employee a specific amount each month based on salary history and years of employment
Employee assumes all risk; employee chooses how much to contribute and investment options
Employer matches employee contributions up to a certain percentage
Employee receives a lump sum payment upon retirement based on investment performance
What is a Defined-contribution Plan?
Employee assumes all risk; employee chooses to contribute into a retirement fund that is invested on their behalf; employers may contribute
Employer assumes all risk; employee receives a fixed monthly benefit upon retirement
Employee receives a guaranteed payout regardless of investment performance
Plan where only the employer contributes and the employee has no control over investments
What are the two categories of Pension Plans?
Defined-benefit Plan and Defined-contribution Plan
Fixed-income Plan and Variable-income Plan
Retirement Savings Plan and Annuity Plan
Government Pension Plan and Private Pension Plan
What is a 401(K) Plan?
A type of defined-contribution pension plan to which employee contributes on a pretax basis; is transferable to another retirement plan
A government-issued health insurance plan for retirees
A savings account for daily expenses
A type of loan offered by banks for home purchase
At what age can you apply to receive your 401(K) Plan without penalty?
59 1/2
55
62
65
What does 'Vested' mean in terms of pension benefits?
Entitled to keep plan benefits; must work with company their is a minimum number of years
Eligible for a company bonus every year
Able to retire at any age
Required to pay extra taxes on pension benefits
What is a Profit-sharing Plan?
Defined-contribution plan - employer allocates a portion of the company's annual profits to each participating employee; added incentive to work towards achieving the company's goal
Defined-benefit plan - employer guarantees a specific retirement benefit amount for each employee
Health insurance plan - employer provides medical coverage to employees
Stock option plan - employees are given the right to purchase company stock at a discounted price
What is an Employee Stock Ownership Plan (ESOP)?
Defined-contribution plan - gives the participants shares of stock in the company; may not sell until you leave company or retire; disadvantage is that it's not diversified
A government-mandated retirement savings account for all employees
A health insurance plan provided by employers to their employees
A short-term loan program for employees
What is an Individual Retirement Account (IRA)?
Personal savings plan that enable workers to set aside money for retirement; limited by law to specific dollar amount
A government-issued bond for retirement savings
A type of health insurance plan for retirees
A checking account with no withdrawal limits
What is a Traditional IRA?
Tax-deductible; taxed when withdrawn; made up to age 70 1/2 and withdrawals must begin; prior to age 59 1/2 subject to penalties
Tax-free; taxed when deposited; can be made at any age and withdrawals are penalty-free
Tax-deductible; never taxed; withdrawals can be made at any time without penalties
Taxable; taxed when deposited; contributions must stop at age 59 1/2
What is a Roth IRA?
Not tax-deductible; earnings are tax-free; can make tax-free withdrawals after 5 years; if 59 1/2 or can use the money to become first time home owner
Tax-deductible; earnings are taxed; withdrawals are always taxed
Not tax-deductible; earnings are taxed; withdrawals are taxed before age 65
Tax-deductible; earnings are tax-free; withdrawals are taxed if used for education
What is a Keogh Plan?
A federally approved, defined-contribution, tax-deferred retirement plan designed specifically for self employed people; early withdrawals are subject to penalties.
A type of health insurance plan for small businesses.
A government grant for starting new businesses.
A short-term loan program for entrepreneurs.
List four ways to take charge of your retirement planning.
Start Early, Review Your Plan Regularly, Make Estimates and Calculations, Adjust Your Plan if Needed
Ignore Planning, Spend Freely, Avoid Calculations, Never Review Your Plan
Delay Planning, Rely Only on Social Security, Avoid Investments, Never Adjust Your Plan
Start Late, Never Review Your Plan, Make No Estimates, Stick to One Plan Forever
What is Stock Ownership?
Ownership interest in the corporation
A type of government bond
A form of real estate investment
A type of insurance policy
What are Shares?
Individual units of ownership, available for purchase
A type of government bond
A form of physical currency
A type of insurance policy
Who are Shareholders?
Investors who purchase shares, part owners
Employees of the company
Customers who buy products
Suppliers of raw materials
What are Initial Public Offerings?
When first put on the market to sell it's offered by company
When a company closes its business
When a company merges with another company
When a company buys back its shares
What is a Stock Market?
Organized trading of stocks, like an auction
A place where only bonds are traded
A supermarket for groceries
A government office for taxes
What is a Stock Exchange?
Central location where stocks are sold on a trading floor
A place where groceries are exchanged for money
A market for buying and selling real estate
A location where only bonds are traded
Fill in the blank: The New York Stock Exchange (NYSE) is the ______ stock exchange where the wealthiest companies in the country are listed.
oldest
largest
newest
smallest
Fill in the blank: The American Stock Exchange (AMEX) is the ______-largest stock exchange where stocks of many smaller and medium-sized companies are traded.
second
third
first
fourth
Fill in the blank: ______ are stocks that meet requirements for being traded on a particular stock exchange.
Listed Stocks
Unlisted Stocks
Preferred Stocks
Penny Stocks
Fill in the blank: Over the Counter Stocks (OTC) are stocks not listed on any stock exchange; they are bought and sold over the ______ or by phone.
internet
television
radio
newspaper
Fill in the blank: The Nasdaq Stock Market is the largest network that handles ______ stocks.
OTC
blue-chip
preferred
municipal
Fill in the blank: The Securities and Exchanges Commission (SEC) is a federal agency that protects the interest of investors by regulating ______, OTC stocks, investment advisers, and any companies' financial records.
stock exchanges
credit unions
insurance companies
mutual funds
Fill in the blank: ______ are payments to shareholders that represent a part of the company's net profits; usually paid 4 times a year (quarterly) in a check or more stock shares.
Dividends
Bonds
Loans
Taxes
Fill in the blank: Capital Gains means ______ and sell high making a profit.
buy low
buy high
sell low
hold long
Fill in the blank: Capital Losses means ______ and sell low creating a loss of invested money.
buy high
buy low
sell high
hold long
Fill in the blank: A ______ is an individual or firm that will buy and sell stocks for clients according to their instructions.
Stockbroker
Accountant
Bank Teller
Financial Advisor
Fill in the blank: A Full-service Stockbroker provides investment advice in addition to handling ______.
stock transactions
bank loans
insurance claims
real estate sales
Fill in the blank: Discount Brokers offer basic services and are ______ expensive.
less
more
very
not
Fill in the blank: Internet Services are brokers that offer service online for people to make trades and give research ______.
materials
accounts
profits
licenses
Fill in the blank: 401 (K) is a type of ______ plan.
retirement
health
education
travel
Fill in the blank: ESOP stands for Employee ______ Ownership Plan.
Stock
Share
Bond
Equity
Mutual Funds are investment vehicles that pool money from many investors to purchase a diversified portfolio of ______.
stocks
cars
real estate
jewelry
Fill in the blank: A Direct Stock Plan is one of 4 other ways to buy ______ in a company.
stocks
bonds
real estate
commodities
Fill in the blank: A Direct Stock Plan allows you to buy stock directly from the ______; cost less than dealing with a broker.
company
bank
government
stock exchange
Fill in the blank: Company's Health, Industry Trends, and Economic Factors are all reasons stock prices ______.
change
disappear
freeze
multiply
Fill in the blank: National and World Events are 4 reasons stock prices change, causing stocks to be ______.
volatile
predictable
static
unchanged
Fill in the blank: The NASDAQ Composite Index tracks ______ domestic stocks that are traded on the NASDAQ system.
5,000
500
50,000
1,000
Fill in the blank: The Dow Jones Industrial Average covers ______ industries, including financial services, technology, retail, entertainment, and consumer goods.
30
20
50
10
Fill in the blank: Standard & Poor's 500 measures the average performance of ______ prominent industrial, transportation, financial, and utility stocks.
500
100
250
1000
Fill in the blank: Common Stocks entitle shareholders to vote on any matters affecting the company; dividends vary, increasing ______ and potential return.
risk
liquidity
taxes
control
Fill in the blank: Preferred Stocks have no voting rights and have less risk because the ______ rate is fixed.
dividend
interest
exchange
inflation
What are Blue Chip Stocks?
Stocks that are new and innovative companies that are growing; high risk
Stocks low in risk because company has proven track record of reliable earnings and dividends
Stocks that are less than a dollar a share; extreme high risk; recommended to be avoided
Fill in the blank: Growth Stocks are stocks that are ________.
new and innovative companies that are growing; high risk
old and stable companies with low growth; low risk
companies that pay high dividends; low risk
companies with declining revenues; high risk
Which type of stock is recommended to be avoided due to extreme high risk?
Blue Chip Stocks
Growth Stocks
Penny Stocks
Which of the following is NOT a way to minimize the risk of stocks?
Long Term Investment
Diversify Portfolio
Ignore research
Plenty of Research
Fill in the blank: To diversify your portfolio, invest in not just different companies but different ________.
industries
locations
currencies
products
Which of the following is a way to research stocks?
Use their product
Look at company's annual report
Read reliable business magazines and newspapers
All of the above
What is a Ticker Symbol?
A type of bond
A series of 1-5 letters that uniquely identifies each stock
A stock rating
Fill in the blank: The date at which a bond meets its maximum amount and it expires is called ________.
Maturity Date
Issue Date
Coupon Date
Settlement Date
Which of the following is NOT a type of bond?
Savings Bond
Treasury Securities
Stock Quotes
Corporate Bonds
Match the following types of bonds with their descriptions:
Savings Bond
Bonds issued by local and state governments; federal tax-free and maybe state and local taxes
Treasury Securities
Bond with a minimum $1000; higher rate than government bond, but riskier
Municipal Bonds
Bond that is very safe; thought of as a form of savings instead of investment
Corporate Bonds
Bonds Guaranteed by US government; not taxed; auctioned like stocks
Fill in the blank: Treasury Bills mature in ________ weeks, minimum purchase amount is $1000 (face value).
13-52 weeks
1-4 weeks
26-104 weeks
52-104 weeks
Which type of Treasury Security matures in 1-10 years?
Treasury Bills
Treasury Notes
Treasury Bonds
Fill in the blank: Treasury Bonds mature in ________ years, minimum purchase amount is $1000.
10+ years
1 year
2-5 years
6-9 years
Which rating is the highest according to Bond Rating Services?
AAA or Aaa
Investment-grade Bonds
High-yield Bonds
Junk Bonds
Fill in the blank: Junk Bonds are ________ risk bonds.
High
Low
No
Medium
What is a Mutual Fund?
Group of investments that is held in common by many individual investors
A type of insurance policy for individuals
A government-issued bond for infrastructure projects
A savings account with a fixed interest rate
