5 Written Questions
5 Matching Questions
- international stock mutual fund
- risk return ratio
- a Certificate of Deposit, usually at a bank; savings account with a slightly higher interest rate because of a longer savings commitment (i.e. six months, one year, etc.).
- b mutual fund that contains international or overseas companies.
- c relationship of substantial reward in comparison to the amount of risk taken.
- d a term used to designate all contracts covering the sale of financial instruments or physical commodities for future delivery on a commodity exchange.
- e purchasing risky investments that present the possibility of large profits, but also pose a higher-than-average possibility of loss.
5 Multiple Choice Questions
- 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.
- 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.
- 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.
- 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).
- the past history of something; with investments, look at the five or ten year record.
5 True/False Questions
risk → 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).
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.
growth stock mutual fund → mutual fund that seeks to provide max. long-term capital growth from stocks of primarily smaller companies or narrow market segments; dividend income is incidental; the most volatile fund; also referred to as a small-cap fund.
mid-cap fund → mutual fund containing a group of medium-sized companies that are growing.
rental real estate → buying real estate to rent out as an investment.