5 Written questions
5 Matching questions
- risk return ratio
- a 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).
- b 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.
- c piece of ownership in a company or mutual fund.
- d relationship of substantial reward in comparison to the amount of risk taken.
- 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
- a term used to designate all contracts covering the sale of financial instruments or physical commodities for future delivery on a commodity exchange.
- funds comprised of large, well-established companies.
- degree of uncertainty of return on an asset; in business, the likelihood of loss or reduced profit.
- account or arrangement in which one would put their money for long-term growth; should not be withdrawn for a suggested minimum of five years.
- purchasing risky investments that present the possibility of large profits, but also pose a higher-than-average possibility of loss.
5 True/False questions
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.
rental real estate → buying real estate to rent out as an investment.
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.
fixed annuity → type of annuity that guarantees a certain rate of return; see annuity.
small-cap fund → mutual fund containing a group of medium-sized companies that are growing.