Personal Finance
Morningstar's investment research website (www.morningstar.com) has a Mutual Fund Ratings systems that can provide investors all of the following EXCEPT
A guaranteed way to pick the best performing funds for the future
Mutual Funds generally have all of the following characteristics EXCEPT
A set guaranteed return on Investment
Which statement about Stock Trading is False
A Future (or Future Contract) is a guarantee that a stock price will go up in the future
Which retirement plan offers pre-tax funding, tax deferred growth, but is taxed on distribution?
A traditional 401K
Which statement about annuities is TRUE.
Annuities generally have large fees, commissions, and expenses in the investment stage.
Which statement about an annuity is FALSE?
Annuity is a government-insured investment program offering monthly payments.
When an investor "dollar cost averages" a security, he/she is
Buying a fixed dollar amount of a particular investment on a regular basis, regardless of share price
Which statement correctly describes an ADVANTAGE of a ROTH 401K over a traditional 401K
Distributions at retirement are tax free.
Most companies today offer a Pension Plan which contributes to a retirement account on your behalf.
False
You will generally pay tax on a retirement account's growth each year, whether you take a distribution or not
False
A Growth Stock Mutual Fund invests generally in ______?
Growth Stocks
An equity security generally
Offers the investor ownership Offers the investor voting rights Can offer the investor a share of profit in the form of dividends
Morningstar's website (www.morningstar.com) can assist us in answering all of the following EXCEPT ________.
Tell us exactly how much money we will make from a fund at a future date
Stock prices are determined daily by ONLY two things, what are they
The number of buyers and sellers
Annuities are great investments and should be a part of every persons investment portfolio
false
Annuities generally have lower commissions and lower annual fees when compared to mutual fund accounts
false
Dividend Reinvestment plans allow you to take regular scheduled income from your stocks holdings.
false
A Bond Fund invests generally in a variety of bonds?
true
A major advantage of a Trust over a Will is that a Trust can "by-pass" probate?
true
A Will _______
Is a written document that describes how property is to be distributed after death; it can be simple or complex
Probate is the court procedure where an estate ______.
Is passed through the legal system from deceased to beneficiaries
When referring to equity securities, the term "volatility
Is the likelyhood of a security to change in value Is measured on a scale called a beta; a beta of 1 is the overall volatility of the stock market. Is a measure of risk and can also be a predictor of possible growth.
Which is NOT a method of reducing risk when investing in stocks:
A. Diversification B. Time, invest for the long run C. Dollar cost averaging D. Learn to buy/sell a bit of what you own each day (D)
Dying without a Will is termed _________
Intestate
Buying stock with borrowed money is called?
Margin accounts
Generally companies will match funds that you put into a 401k retirement plan; meaning they will contribute funds with a predetermined match rate and limit.
True
A Stock Index is used to measure market movements and report changes of value in representative groups of stocks (a measuring stick).
true
Bonds are also called debt securities?
true
Money that is withdrawn from a retirement account is called a distribution
true
An example of a sector fund is____________?
Pharmaceuticals
A drawback of investing in Money Markets, CD's, and bank savings accounts is that...
Their return rates rarely out-pace inflation, meaning their worth can actually go down in value
401k plans let you invest pre-tax dollars into a retirement account, your money will grow tax deferred, and is taxable on distribution.
True
Stocks are equity securities and sometimes called "equities"
True
Withdrawing money for college and buying a first time home can be exceptions to the 10% penalty on early withdrawal on an IRA.
True
Suze Orman has a dim view of annuities as an investment. However they do make sense
When someone else (like an employer) is paying for it. and In the case of someone who takes a portion of their savings, purchases an immediately annuity and wants supplemental income payments for the remainder of life.
A Will is only needed if you have a large estate and have many things of value.
false
Because someone is licensed to sell investments, means they must know what they are doing and you can assume they will manage your money correctly
false
Capital gains (taxation) on stocks occur when your stock price goes up in value regardless of whether a sale has taken place
false
If you and your spouse die together without a Will, your surviving family determines who will be the guardian of your children?
false
Loaded funds perform better than non-loaded funds?
false
Mutual Funds are investment companies that invest only in the stock market?
false
Only family members may contest a will
false
Stocks and Mutual Funds are best suited for short term investing; like days or weeks.
false
While the NASDAQ is both a stock market and a stock index; the S&P 500, and the DOW (Dow Jones Industrial Average) are both________.
stock indexes
A Trust can offer a number of benefits including_______?
the possibility of eliminating/reducing estate taxes avoid probate be revocable and irrevocable. control assets and payments upon conditions after death
A $100,000 Immediate Annuity for a single person at age 60, will generally pay lower monthly payments for a female than a male
true
A 401K is a "Pay yourself first" method, beacuse money is put into the plan before you get your pay check.
true
A Trust in its simplest terms is an agreement in which a person transfers something of value to a trusted person for the later benefit of a third person?
true
A mutual fund is a diversified and professionally managed investment where investors mutually fund the purchase of securities toward a pre-determined investment objective ?
true
A mutual fund with a beta of 1 is projected to move in correlation with the market, a higher beta is more volatile, a lower beta is more stable?
true
A risk we face when investing in a corporate bond is credit risk?
true
A rollover from a 401k to a Traditional IRA is a non-taxable, non-penalty event
true
An Annuity is an investment contract with an insurance company that can provide a stream of life-long monthly income (generally for retirement
true
Annuities can be Qualified Retirement plans, thus payments can be taxed and subject to an early distribution penalty if you withdrawal before retirement age (currently 59 ½ years old).
true
Basically, Annuities are a bet with an insurance company. You give them a large amount of money and they give you back small amounts of money per month for life.
true
Bonds can be a source of regular income payments over a fixed time period?
true
Bonds can be an investment that has less risk than the stock market and provide a higher return than money market accounts?
true
Common stock gives you ownership, voting rights, and is an investment that can offer capital appreciation.
true
Despite their volatility, Stocks, and stock mutual funds have proven to be profitable investments over the long term.
true
Estate tax law allows you to pass an unlimited amount of assets to your surviving spouse but estate taxes can apply when passing assets beyond a husband and/or wife?
true
Generally speaking Bonds are a safer and more conservative investment than stocks
true
If a company has a 2 year vesting period, it means their match money does not become yours for 2 years
true
If your company has a "50% match up to 7%", this means for every dollar you put into your retirement account your employer will add 50 cents up to a maximum of 7% of your salary.
true
Interest earned from a Municipal Bond or a Municipal Bond Fund are generally free from federal income tax?
true
Taking a retirement distribution before your minimum required retirement age or leaving it in beyond the maximum age can result in a tax penalty; assuming there is not a qualified exception.
true
The 2 main ways to reduce risk are Diversification and Time (invest for the long-term)
true
The volume of a stock refers to the amount of trading that has taken place on that particular stock.
true
Transferring funds from one retirement account to another is called a Rollover.
true
When you have an Annuity, upon death the balance of your investment (generally) reverts back to the insurance company not your estate.
true
Your Asset Allocation is the division of funds you put into different categories of investments, ie Bonds, Stocks, CD'd, etc.
true
