Investing

Intro to Investing

100

True or False: All investments eventually increase in value if held long enough. a) True b) False

What is False

200

True of False: Savings accounts generally offer a higher yield than money market accounts. a) True b) False

What is b) False

300

This "rate" is the percentage of the original investment by which an investment has increased (positive) or decreased (negative)

Rate of return

400

Savings accounts at banks are protected by: a) FDIC insurance b) Risk and return curves c) An annual percentage rate d) Mutual fund returns

What is FDIC Insurance

500

Inflation is: a) A number set by the government that causes prices to rise b) A number measured by the government that describes the changing prices of everyday goods. c) Automatically subtracted from interest rates quoted by banks for their savings accounts

What is b) A number measured by the government that describes the changing prices of everyday goods.

Diversification

100

This is the collection of all of one person's assets.

What is a portfolio

200

True or False: If you buy enough different stocks, you can diversify out all risk in the stock market. a) True b) False

What is b) False

300

Diversification is good because: a) It focuses investments on a single stock to take advantage of growth potential b) Mutual funds have higher fees than individual stocks c) Interest rates rise and fall d) It spreads the risk of investment

What is d) It spreads the risk of investment

400

Over about 40 years, your portfolio should probably: a) Change from higher-risk to lower-risk investments b) Sell every holding each year to figure out how well you are doing c) Grow equally well in all sectors, or it is a bad financial plan d) Become less and less conservative, increasing in risk from year to year

What is a) Change from higher-risk to lower-risk investments

500

Your return with a diversified portfolio will: a) Be exactly 11.3% every year b) Rise and fall, but have less risk than a smaller number of stocks and a smaller number of sectors and asset classes c) Fall if a single company in your portfolio goes out of business d) Beat absolutely every other investor

What is b) Rise and fall, but have less risk than a smaller number of stocks and a smaller number of sectors and asset classes

Investing for Retirement

100

401K plans are so named because: a) You can only contribute up to $401,000 b) Of the tax law that authorizes them c) Over 400,000 people have taken advantage of them

What is b) Of the tax law that authorizes them

200

Which of the following is a benefit of an employer-sponsored plan? a) Contributions are not taxed until withdrawn b) Employers often match contributions c) Typically they are managed by professional investors d) All of the above

What is c) All of the above

300

Which of the following is an example of a defined benefit plan? (AKA you withdraw a fixed amount every month until the plan exhausts) a) A pension b) Roth IRA c) 401(k)

What is a) A pension

400

What is the primary benefit of investing in a Roth IRA?

Contributions are taxed on deposit, but one does not pay tax when they withdraw after retirement

500

Give two examples of retirement accounts that your employer might "match" your contributions to depending on company policy. 

Pension and 401k

Soft Serve

100

A savings account that compounds quarterly compounds how often?

4 times per year (every 3 months)

200

Simple Interest: Mr. Neri invests $1000 for a year earning 7.5% annual interest. How much is his account worth after one year? 

$1075

300

The agency that regulates the stock market

SEC

400

If your Gross Pay is $3444 and your Net Pay is $2474, what was the deduction for this pay period?

$970

500

Tax Day in the United States

April 15th

Investing

100

A person who owns stock in a company

Shareholder

200

This type of investment is essentially loaning money to a company or the government to be paid back at a set date with interest.

Bond.

300

The central bank of the United States, who sets economic policy & prints & destroys money.

What is the Federal Reserve

400

An increase in the value of a capital asset (investment or real estate) that gives it a higher worth than the purchase price.

What is Capital Gain?

500

A percentage of the profits shared with shareholders

What is a dividend?