Investing Basics and Risk
What is the rule you use to estimate the number of years it takes for an investment to double?
Rule of 72
What is the acronym for the government commission created by Congress to regulate the securities markets and protect investors?
What is a debt investment in which an investor loans money to an entity, like a corporation or government, for a defined time at a fixed interest rate?
Bond
What is the name for a declaration of a person's wishes regarding the disposal of their property after death?
Will
What federal government organization enforces laws against illegal insider trading?
U.S. Securities and Exchange Commission
What type of account is like a savings account but offers a higher (variable) interest rate and is a way to save money?
Money Market Account
What is a market condition characterized by a general decline in the stock market, often measured by a price decline of 20% or more?
Bear Market
What is the primary benefit that Mutual Funds provide, lowering overall risk by owning small pieces of many different companies?
Diversification
What tax-advantaged retirement plan requires contributions to be taxed now, so that the withdrawals in retirement are not taxed?
Is it a Roth or Traditional IRA
Roth IRA
What is the term for buying or selling corporate stocks based on information that is not available to the public?
Illegal Insider Trading
What is the risk that your investment will be worth less over time if prices for goods and services rise faster than your investment's return?
Inflation Risk
What is the common name for a market condition associated with increasing investor confidence and anticipation of future price increases?
Bull Market
What is the category of financial activity that involves a medium to long time frame, low to high risk, and the objective of retirement or financial freedom?
Investing
Assets minus liabilities
What is the reason why a CEO buying shares of their own company's stock is considered legal insider trading?
The trade is reported to the Securities and Exchange Commission
What type of short-term U.S. government debt obligation has a maturity of one year or less and is backed by the Treasury Department?
Treasury Bills (T-Bills)
What index, made up of 30 significant stocks, helps investors determine the overall direction of stock prices?
Dow Jones Industrial Average
What low-cost type of fund creates a portfolio of stocks that mirrors the collection and performance of a market benchmark like the S&P 500?
Index Fund
What is the term for what you own, such as cash, real estate, stocks, and IRAs?
Assets
The Scenario
Insider: Maria Chen, the Chief Executive Officer (CEO) of QuantumTech Innovations, a publicly traded software company.
Action: Maria believes that QuantumTech's stock, currently trading at $125 per share, is undervalued. On Monday, she decides to use some of her personal savings to purchase 5,000 additional shares of QuantumTech stock on the open market.
Legal Trading
What is the risk that the price of an investment will go down, which is often related to supply and demand?
Market Price Risk
What is a distribution of a portion of a company's earnings, decided by the board of directors, to its shareholders?
Dividend
What term means "A distribution of a portion of a company's earnings... to a class of its shareholders"?
A Dividend
What retirement plan is typically based on years of service and compensation, with the employer bearing all of the risk and responsibility for funding it?
Pension
What year was the Securities and Exchange Commission (SEC) formed by Congress, partly in response to the major financial scandals of the 1929 stock market crash?
1934