chapter 8 Flashcards Preview

economics > chapter 8 > Flashcards

Flashcards in chapter 8 Deck (35)
Loading flashcards...
1

Piece of ownership in a company, mutual fund or other investment

share

2

A retirement plan found in nonprofit organizations such as churches, hospitals and schools.

403(b)

3

To ensure that some of your retirement savings will not be subject to income tax upon withdrawal, you would contribute to:

a roth IRA

4

Employee benefits packages:

Are non-wage compensations provided to employees in addition to their normal wages or salaries

5

Savings accounts and money-market accounts are most appropriate for:

Emergency funds and short-term goals

6

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)

dividend

7

The benefit of diversification in your investments is

reduced risk

8

Long-term investments, properly diversified, include the following mutual funds:

Growth, growth and income, international, aggressive growth

9

Quality of an asset that permits it to be converted quickly into cash without loss of value; availability of money

liquidity

10

Single stocks and mutual funds carry the same amount of risk.(t/f)

false

11

Federal agency responsible for collecting taxes and for the interpretation and enforcement of the Internal Revenue Code

internal revenue service

12

Securities that represent part ownership or equity in a corporation

stocks

13

A savings account sold by an insurance company, designed to provide payments to the holder at specified intervals, usually after retirement

annuity

14

A young investor willing to take moderate risk for above-average growth would be most interested in:

mutual funds

15

A list of your investments

portfolio

16

A savings plan operated by a state or educational institution designed to help families set aside funds for future college costs

529 plan

17

A reason that people need to save and invest is to:

Enable their money to make money

18

Which of the following is a good investment option?

mutual funds

19

You can start investing with a small amount of money.(t/f)

true

20

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:

401(k)

21

You should start investing as soon as you have your college education funded.(t/f)

true

22

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(t/f)

false

23

Money markets are great for your emergency fund due to their liquidity and stability.(t/f)

true

24

The government agency responsible for regulating the stock market

Securities Exchange Commission

25

When buying and selling investments, you should not

Switch your investment strategy often, based on market conditions

26

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(t/f)

true

27

Relationship of substantial reward compared to the amount of risk taken

risk-return ratio

28

Good investment portfolios are extremely complex.(t/f)

false

29

Saving and investing have nothing to do with the amount of money you make.(t/f)

true

30

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.