Question

Saving and investing have nothing to do with the amount of money you make.
False
True
A mutual fund portfolio that is properly diversified will have all investment dollars located in just one of four different classes of financial assets.
False
True
Which of the following statements about the stock market is false?
Formed in 1792, the New York Stock Exchange (NYSE) is the smallest organized stock exchange in the United States.
The Dow Jones Industrial Average is one measure of the stock market.
The stock market is a generic term that encompasses the trading of securities.
The terms bull market and bear market describe upward and downward market trends.
You can start investing with a small amount of money.
False
True
The benefit of diversification in your investments is:
Reduced risk
Reduced tax liability
Increased risk
Increased return
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:
Roth IRA
401(k)
Bond funds
Single stocks
Which of the following is a good investment option?
Futures
Mutual funds
Viaticals
Gold
Federal agency responsible for collecting taxes and for the interpretation and enforcement of the Internal Revenue Code
Federal Deposit Insurance Corporation
Internal Revenue Service
When buying and selling investments, you should not:
Learn the different types of investments
Set your investment goals and consider a time frame
Understand basic investment strategies and identify ones that will help you reach your goals
Switch your investment strategy often, based on market conditions
Securities that represent part ownership or equity in a corporation
Bonds
Stocks
Savings accounts and money-market accounts are most appropriate for:
Savings accounts and money-market accounts should be avoided since they carry high risk
Emergency funds and short-term goals
Earning a high rate of return
Long-term investments like retirement
To ensure that some of your retirement savings will not be subject to income tax upon withdrawal, you would contribute to:
A traditional IRA
An annuity
A Roth IRA
A 401(k)
A retirement plan found in nonprofit organizations such as churches, hospitals and schools.
403(b)
401(k)
457
GIC
Company Xʹs board of directors has decided to issue a portion of its earnings to its shareholders. If you own stock in Company X, you can expect to receive a(n):
Yield
Buy-out
Dividend
Investment
Relationship of substantial reward compared to the amount of risk taken
Investment strategy
Risk-return ratio
Money markets are great for your emergency fund due to their liquidity and stability.
False
True
A list of your investments
Portfolio
Bank statement
Long-term investments, properly diversified, include the following mutual funds:
Growth, growth and income, bond, aggressive growth
International, bond, aggressive growth, growth
Growth, growth and income, international, aggressive growth
Growth, balanced, international, bond
A savings account sold by an insurance company, designed to provide payments to the holder at specified intervals, usually after retirement.
Annuity
Single stock
Mutual fund
Money market
The purpose of 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
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
Quality of an asset that permits it to be converted quickly into cash without loss of value; availability of money
Liquidity
Risk

Answer 1

1. False

2. False

3. "Formed in 1792, the NYSE is the smallest..." — False (that statement is false)

4. True

5. Reduced risk

6. 401(k)

7. Mutual funds

8. Internal Revenue Service

9. Switch your investment strategy often, based on market conditions (you should not do this)

10. Stocks

11. Emergency funds and short-term goals

12. Roth IRA

13. 403(b)

14. Dividend

15. Risk-return ratio

16. True

17. Portfolio

18. Growth, balanced, international, bond

19. Annuity

20. False

21. True

22. Liquidity