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- 1. Multiple Choice
The benefit of diversification in your investments is:
Reduced risk
Increased return
Reduced tax liability
Increased risk
- 2. Multiple Choice
A reason that people need to save and invest is to:
Enable their money to make money
Increase the money supply
Be able to get anything they want
Have an opportunity to talk with financial service providers
- 3. Multiple Choice
Which of the following is a good investment option?
Gold
Viaticals
Mutual Funds
Futures
- 4. Multiple Choice
Savings accounts and money-market accounts are most appropriate for:
Long-term investments like retirement
Earning a high rate of return
Emergency funds and short-term goals
Savings accounts and money-market accounts should be avoided since they carry high risk
- 5. Multiple Choice
Long-term investments, properly diversified, include the following mutual funds:
Growth, balanced, international, bond
Growth, growth and income, international, aggressive growth
International, gond, aggressive growth, growth
Growth, growth and income, bond, aggressive growth
- 6. Multiple Choice
Company X's board of directors has decided to issue a portion of its earnings to its shareholders. If you won stock in Company X, you can expect to receive a(n):
Investment
Dividend
Buy-out
Yield
- 7. Multiple Choice
Which statement is true about liquidity?
The more liquid an investment, the more return
The less liquid the investment, the less return
The more liquid an investment, the less return
Both A and B
- 8. Multiple Choice
A savings account sold by an insurance company, designed to provide payments to the holder at specified intervals, usually after retirement.
Money market
Mutual fund
Single stock
Annuity
- 9. Multiple Choice
Employee benefits packages:
Should not be a consideration when looking for a job
Never include retirement plans
Are the same regardless of the company you work for
Are non-wage compensations provided to employees in addition to their normal wages or salaries
- 10. Multiple Choice
When buying and selling investments, you should not:
Switch your investment strategy often, based on market conditions
Understand basic investment strategies and identify ones that will help you reach your goals
Set your investment goals and consider a time frame
Learn the different types of investments
- 11. Multiple Choice
Which of the following statements about the stock market is false?
The terms bull market and bear market describe upward and downward market trends.
The stock market is a generic term that encompasses the trading of securities.
The Dow Jones Industrial Average is one measure of the stock market.
Formed in 1792, the New York Stock Exchange(NYSE) is the smallest organized stock exchange in the United States.
- 12. Multiple Choice
A retirement plan found in nonprofit organizations such as churches, hospitals and schools.
GIC
457
401(k)
403(b)
- 13. Multiple Choice
In some cases, employers will match the employee contribution, but you should fund your plan whether your company matches or not. This statement refers to:
Single stocks
Roth IRA
Bond funds
401(k)
- 14. Multiple Choice
A young investor willing to take moderate risk for above-average growth would be most interested in:
Single stocks
Bonds
Mutual funds
Real estate
- 15. Multiple Choice
To ensure that some of your retirement will not be subject to income tax upon withdrawal, you would contribute to:
A 401(k)
An annuity
A Roth IRA
A traditional IRA
- 16. Multiple Choice
Savings and investing have nothing to do with the amount of money you make.
True
False
- 17. Multiple Choice
Money markets are great for your emergency fund due to their liquidity and stability.
True
False
- 18. Multiple Choice
The purpose is war bonds is to finance military operations during war time. The last time the United States issued war bonds was during the Vietnam War.
True
False
- 19. Multiple Choice
If you get into financial trouble, borrowing against your retirement plan is a good option.
True
False
- 20. Multiple Choice
A mutual fund portfolio that is properly diversified will have all investment dollars located in just one of four different classes of financial assets.
True
False
- 21. Multiple Choice
If you leave a job and have money saved in your employer's retirement plan, always roll that money into an IRA using a direct rollover, which allows you to avoid taxes and penalties.
True
False
- 22. Multiple Choice
Single stocks and mutual funds carry the same amount of risk.
True
False
- 23. Multiple Choice
You should start investing as soon as you have your college education funded.
True
False
- 24. Multiple Choice
You can start investing with a small amount of money.
True
False
- 25. Multiple Choice
Good investment portfolios are extremely complex.
True
False
- 26. Multiple Choice
A savings plan operated by a state or educational institution designed to help families set aside funds for future college costs
529 Plan
Guaranteed Investment Contract
- 27. Multiple Choice
Distribution of a portion of a company's earnings, decided by the board of directors, to a class of its shareholders
interest
dividend
- 28. Multiple Choice
Federal agency responsible for collecting taxes and for the interpretation and enforcement of the Internal Revenue Code
Internal Revenue Service
Federal Deposit Insurance Corporation
- 29. Multiple Choice
The government agency responsible for regulating the stock market
Federal Reserve
Securities Exchange Commission
- 30. Multiple Choice
Money that is invested, either tax deferred or tax free, within a retirement plan
tax-favored dollars
dividend
- 31. Multiple Choice
Securities that represent part ownership or equity in a corporation
stocks
bonds
- 32. Multiple Choice
Piece of ownership in a company, mutual fund or other investment
401(k)
share
- 33. Multiple Choice
A list of your investments
bank statement
portfolio
- 34. Multiple Choice
Relationship of substantial reward compared to the amount of risk taken
risk-return ratio
investment strategy
- 35. Multiple Choice
Quality of an asset that permits it to be converted quickly into cash without loss of value; availability of money
risk
liquidity
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