Retirement/Estate Planning
The most common retirement benefit is...
Social Security
Name a low risk investments
savings account, certificate of deposit, money market accounts
Monika invests $10,000 into a high yield savings account with an annual interest rate of 10%. Approximately how many years will it take for her money to double?
7.2 years
This refers to a change in purchasing power over time. Money becomes less valuable as years pass because of...
Inflation
Stocks pay ________, and means you _____ part of the company.
dividend, own
ROTH means...
You pay taxes "right now"
contribute after paying taxes
Name a medium risk investments
bonds (government, municipal, and corporate), stocks, Mutual funds
Leilani invested $600 into a stock, and lost $150 after one year. What is her rate of return on this investment?
-25%
(she lost 25% of the money she invested)
If you receive $1,000 a year from now instead of today, you lose...
Potential Earnings/Interest/Dividends
What is the name of a pre-diversified investment with medium risk?
Mutual Fund
The money you contribute to retirement accounts is invested in...
Mutual Funds
Name a high risk investments
options, futures, collectibles
If Ms. Knerr has an interest rate of 9%, about how many times will her money double in 25 years?
3 times
(8 years to double; 25/8 = 3.1)
Compounding Interest means...
You earn interest on interest (as well as the principal amount in an account)
A stock from a company that does well regardless of economic conditions (ex. Apple)
Name two positive outcomes of estate planning
● Provide for loved ones after you are gone
● Strengthen family relationships by giving them a path for them to follow
● Reduce time, effort and costs for survivors
● Leaves a legacy to family, organizations, institutions
The higher the risk, the higher the ________
reward/potential profit
If inflation has increased 53% since 2007, how much would an item that cost $4 in 2007 cost now?
$6.12
When stock prices are generally rising. It is characterized by optimism.
Bull Market
Explain why a futures investment is risky...
You are betting on the stock market (examples: prices of agricultural product)
Who should you consult for estate planning?
a lawyer
This is a strategy for reducing your risk by investing your money in multiple types of investments.
Diversification
If you want your money to double within 4 years, what rate of return would you need?
What kind of investment would be likely to have this kind of return?
18%
Medium-higher risk investments
When stock prices are generally falling. It is characterized by pessimism.
Bear Market
Another name for a U.S. government bond is...
Series EE