5 Written Questions
5 Matching Questions
- small-cap fund
- a piece of ownership in a company or mutual fund.
- b a food, metal, or fixed physical substance that investors buy or sell, usually via future contracts.
- c mutual fund that invests in companies whose market value is less than $1 billion; largely consists of smaller, more volatile companies; also called aggressive growth stock mutual fund.
- d to spread around one's investment dollars among several different classes of financial assets and among the securities of many issuers; results in lowered risk.
- e quality of an asset that permits it to be converted quickly into cash without loss of value; availability of money; when there is more liquidity, there is typically less return.
5 Multiple Choice Questions
- pool of money managed by an investment company and investment company and invested in multiple companies, bonds, etc.; offers investors a variety of goals depending on the fund and its investment charter; often used to generate income on a regular basis or to preserve an investor's money; sometimes used to invest in companies that are growing at a rapid pace.
- buying real estate to rent out as an investment.
- debt instrument where an issuer such as a corporation, municipality or government agency owes you money; a form of I.O.U.; the issuer makes regular interest payments on the bond and promises to pay back or redeem the face value of the bond at a specified point in the future (the maturity date).
- degree of uncertainty of return on an asset; in business, the likelihood of loss or reduced profit.
- distribution of a portion of a company's earnings, decided by the board of directors, to a class of its shareholders; generally distributed in the form of cash or stock.
5 True/False Questions
mid-cap fund → mutual fund containing a group of medium-sized companies that are growing.
international stock mutual fund → fund that buys stock in medium-sized companies that have experienced some growth and are still expanding; also called a mid-cap fund.
speculative → purchasing risky investments that present the possibility of large profits, but also pose a higher-than-average possibility of loss.
money market → mutual fund that seeks to maintain a stable share price and to earn current income by investing in interest-bearing instruments with short-term (usually 90 days or less) maturities.
annuity → contract sold by an insurance company, designed to provide payments to the holder at specified intervals, usually after retirement; the holder is taxed at the time of distribution or withdrawal, making this a tax-deferred arrangement.