chapter 10: personal finance
allowance
money given to a child by his/her parent/ guardian, typically on a weekly basis
nerd
one who is picky about budgeting and numbers
self esteem
one's attitude about themselves
accountability
responsibility to someone or for some activity
Diversification means to spread around. t/f
True
Risk return ratio says that as the risk of investment increases, the return increases. t/f
True
What are two types of annuity?
Variable & Fixed
According to this ratio, as the risk goes up, so should the return
Risk Return Ratio
commission
a fee paid for providing a service/earning money based on the work you do
free spirit
a person who things, "everything will work out fine," and typically hates to deal with numbers
value system
a person's priorities, beliefs, and standards considered important to you
The difference between single stocks and mutual funds is that single stocks are with one company and have a high degree of risk, but a mutual fund is a pool of 90
200 companies, and, because you are diversified, the risk is much lower. t/f- True
Similar to investing, but is for short term returns (3
5 years)-Saving
A solid track record of investment fits this timeframe
5-10 years
The availability of your money
Liquidity
A collection of money from different investors, which is used to purchase stocks, bonds, or other investments, and is managed by a fund manager is called:
Mutual Funds
When investors pool their money together it is called what?
Mutual Funds
The most aggressive mutual funds tend to be from:
Companies that are a little younger and growing
Oil and gold are examples of
Commodities
Savings accounts with insurance companies are called what?
Annuities
A company owes you money, this debt is called what?
Bond
A share is a piece of ownership in an annuity. t/f
False
Single stocks are a wise investment because they have a high return. t/f
False
The difference between saving and investing is the amount of interest you earn on your money. t/f
False
With all investments, as the risk goes up, the return goes down. t/f
False
Stocks from overseas companies are what type of fund?
International growth stock mutual funds
What are 3 risks to consider when investing?
You could lose all of your money, Inflation & Your money is not liquid
Never invest using ______ money
borrowed
Always invest only for tax savings purposes. t/f
false
fiscal
having to do with money
work ethic
how motivated, loyal and honest you are in your work