Miscellaneous
How is risk tolerance defined in investing?
the amount of uncertainty a person is willing to handle
What is ONE alternative type of investment mentioned in class?
Precious Metals, gold, silver, real estate, trading cards, etc.
FALSE
Anyone can use it!
What is the “Rule of 72” used for in terms of investing?
To determine how long it takes for an investment to double.
Distribution of a portion of a company's earnings, decided by the board of directions, to a class of its shareholders.
What is dividend?
This Government Run health insurance program for those aged 65+ as well as those who are disabled, is paid for through taxes, and covers basic services and primary hospital care.
Medicare
A small piece of ownership in a company; as the value of the company goes up, it pays dividends (profit) to investors. This type of investment carries high risk.
What are stocks?
True (A) or False (B):
Insider trading is when an employee uses private company information to purchase stocks or other securities for personal gain
TRUE
What does “vesting” refer to in retirement planning?
the waiting period before earning the right to employer matched contributions
The government agency responsible for regulating the stock market.
What is the Securities Exchange Commission? (SEC)
______________ is a risk-management technique that mixes a wide variety of investments within a portfolio.
What is "diversification"?
What is the main characteristic of a “Blue-Chip Stock?”
a stock of a large and reputable company.
What is the purpose of the “Sarbanes-Oxley Act” which was passed in 2002?
to improve auditing and public disclosure.
How does a 401(k) plan related to retirement? What is it?
It is an employer-sponsored plan that matches contributions.
What does “DRIP” stand for in investing?
Dividend ReInvestment Plan
Formerly known as "Food Stamps", this program provides food assistance for seniors, disabilities, and low-income earners.
SNAP or Supplemental Nutrition Assistance Program
Which investment strategy involves making multiple trades in a day by analyzing patterns, trends, and exploiting price movements?
Day Trading
Dodd-Frank Act (2010)
How is a living will used in estate planning?
it details how you prefer to receive medical benefits if incapacitated.
Quality of an asset that permits it to be converted quickly into cash without loss of value; availability of money
What is liquidity?
What are the differences between a W-4, W-2, & 1040 tax forms?
W-4 = employer withholding form.
W-2 = Earnings form sent from employer for the past year's income.
1040 = standard tax form for most people.
You bought 10 shares of stock in Streaming Video Company for $45 per share. Two months later you sold the 10 shares of stock for $80 per share. What was your profit or less on the stock?
(Assume that it does not pay a dividend and you did not incur any fees)
Profit of $350
The ________ ________ is funded with after-tax money, meaning you pay taxes right now which allows you to use the money in your account tax free in retirement.
What is Roth IRA?
What is the purpose of “power of attorney” in estate planning?
to appoint someone to manage your estate on your behalf.
Which term describes the quick and unexpected changes in a value or price of an investment?
VOLATILITY