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personal finance 2
| Question | Answer |
|---|---|
| least liquid of all investments | rental real estate |
| Aggressive Growth Funds | small-cap |
| risk goes up, return goes up | risk return ratio |
| savings account within an insurance company | annuity |
| piece of ownership in a company stock | share |
| spread around the risk | diversification |
| growth and income funds | large-cap |
| list of your investments | portfolio |
| always check this record when investin | 5-10 year track record |
| degree of uncertainty of the return on an investment | risk |
| liquidity means to spread around and lower risk | false |
| a single stock is the best place to keep your emergency fund | false |
| a certificate of deposit is the best place to keep an emergency fund | false |
| diversification lowers your risk with investment | true |
| commodities and futures are extremely speculative and carry a high risk | true |
| percent any 10-year period in the stock market has made money | 100 |
| long term investments properly diversified include the following mutual funds | growth, growth and income, international, aggressive growth |
| what is the KISS rule of investing | Keep It Simple Stupid |
| which of the following is not a good investment gold, viaticals, futures, or all | all of the above |
| which statement is true about liquidity | the more liquid an investment, the less return |
| which is not a type of annuity | stable |
| a savings account with a certificate is a | C.D. |
| why do you look at the long-term track record with a mutual fund | It shows what you can expect over time from the fund and whether or not it's reliable to invest in |
| what are some investments that don't give you a high rate of return | single stocks, C.D.'s, bonds, gold |
| list four types of investments that you should always avoid | day trading, gold, commodities, futures |
| how do you go about finding the right person to help you invest | Find someone with the heart of the teacher that actually wants you to understand and learn |
| what was the most important fact or idea about investing that you learned in this lesson | that it's better to spread your money out and invest in multiple companies instead of just one. And that mutual funds are better then single stocks. |
| name one thing from this lesson that you could apply to your life right now | I can start investing now in a mutual fund cause that's better then a single stock |
| Daniel just graduated from college and wants to invest 15% of his income into mutual funds. He earns an annual salary of $32,000 but is $21,000 in debt with his car and student loan. He has $500 in savings. What steps does Daniel need to take? | I would say Daniel needs to increase his emergency fund and pay off all his debt before he starts investing |
| How are single stocks different from mutual funds and which is the better investment? | Single stocks are one company while mutual funds are multiple. Mutual funds are a better investment because there is less risk. |
| John is anxious on whether he has enough mone for retirement. His is considering borrowing 20,000 dollars against his home to invest in a mutual fund. The track record for the fund is 21.2 and the interest rate on the loan is 7.5%. Should John do this? | No because you shouldn't invest with borrowed money. John should also look at a longer track record preferably 10-15 years. John also needs to look at the different types of mutual funds and keep his portfolio balanced among the four. |
| Cadance and Mike just inherited 25,000 dollars. They still have 10,000 dollars in debt but want to invest. What question would Dave ask them and what would he tell them to do? | Dave asks them if they've decided to get rid of their credit cards. Otherwise they'll keep going into debt if they haven't changed their behavior. Dave would tell them to pay off debts, and get an emergency fund before they start investing. |
| Brooke's friend has been bugging her to invest in gold. Brooke has 1,000 dollars that she is ready to invest in. What would you tell her to do? | Dave would tell her not to invest in gold because it's a poor investment. Instead he would tell her to open a Roth IRA. |
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