BUSI

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this activity helps you spot opportunities to maximize profits or reduce losses when you sell your investments.

accurate record keeping

accurate record keeping can help you decide if you want to invest _______ funds in a particular investment.

additional, more, extra, or less

dividends

are not a requirement

government bonds are considered a(n) _______ safety, _______ risk, investment.

blank 1: high blank 2: low

when investing in stocks, the investor must know the company has no requirement to _______ the money and no obligation to provide _______.

blank 1: repay, return, or refund blank 2: dividends

year-to=year real estate values nationally increase _______ to _______% on average

blank 1: three or 3 blank 2: five or 5

what are the two types of stocks?

common and preferred

which of the following is the last step for effective investment planning?

continue to evaluate your investment program

People choose mutual funds because they invest in many different investments at one time. This is known as _____.

diversification or diversifying

the first step for effective investment planning is to:

establish your investment goals

corporations are under a legal obligation to pay dividends.

false

true or false: the less time you have to let your investments work, the more advantageous it is to invest in stocks rather than short-term government bonds and certificates of deposit.

false

small cap stocks are those issued by small, rapidly _______ companies.

growing or expanding

when establishing the minimum record-keeping requirements you want to keep track of dividends, interest paid, and other sources of _______.

income

many beginning investors believe that real estate is an investment that

increases in value every year

the younger you are as an investor, the more likely you are to invest a _______ portion in growth investments

larger, greater, bigger, higher, high, large, or big

real estate is considered to have a low _______ factor.

liquidity

_______ is the most important factor for real estate investments.

location

after marking your investments, it is crucial to:

monitor their activity

since 1926, stocks have had positive gains _______ than they have lost money.

more often

there are two basic types of stock: common stock and _______ stock.

preferred

a person with little to no investing experience may choose mutual funds because they offer:

professional management

comparing your checkbook balance to the bank balance is called:

reconciliation

match your time horizon with the applicable investment option.

stocks=5-10 years certificate of deposit= 2 years or less

_______ consequences affect many areas of investing including dividends, interest, and rental income.

tax

another factor affecting investing is your age. younger investors can afford to invest a larger percentage in growth stocks because if their investment fails:

they have time to make it up

true or false: monitoring is the process of keeping track of your investments and following their progress.

true

payday loans are typically used by people who:

-are driven into debt by misfortune -run up debt by free spending -are trapped by debts

what types of financial institutions have federal deposit insurance through FDIC?

-commercial banks -credit unions -savings and loans

what actions should you take if you are a victim of identity theft?

-contact the social security administration -file a police report -place a fraud alert on your credit report

benefits of money market accounts include:

-deposit insurance -a favorable interest rate

some tax advantages of ee bonds are:

-interest is exempt from state and local taxes -there is no federal income tax until redeemed

match interest rates and the value of bonds.

-interest rate decreases=bond prices increase -interest rate increases=bond prices decrease

the APY formula can be expressed as: APY=100{(1+interest/principal)_______/days in term-1}

365

a $200 savings account that earned $8 after a year would have a rate of return, or yield, of _______ percent.

4

some 'shadow' banking services like money-market funds, reloadable prepaid cards are not covered by _______ _______ insurance.

blank 1: federal blank 2: deposit

_______ in an investment means minimal risk of loss while _______ in an investment means a measure of uncertainty about an outcome.

blank 1: safety or safe blank 2: risk

Mobile web banking with internet access of the financial institution's website is one of the three methods to access financial service activities through a(n) _______ or _______.

blank 1: smartphone or smartphones blank 2: tablet or tablets

typical returns are higher for _______ and mutual funds which offer high potential returns compared to CDs or _______ accounts.

blank 1: stocks or stock blank 2: savings or saving

true or false: typically each person is insured up to $100,000 deposited in to each financial institution.

false

if a customer "rolls over" her or his payday loan, it is easy to:

have fees that exceed the amount borrowed

the process of saving money to buy a house in three years could be considered an:

intermediate goal

fluctuation of prices due to the behaviors of investors in the marketplace is known as:

market risk

writing a check when you do not have funds to cover it:

may cause a large fee to be charged

tom wants an investment with minimal chance of loss. he is mainly concerned about the investment's:

safety

a _______ and loan association traditionally specializes in passbook accounts and mortgage loans.

savings

Demand deposits are NOT:

savings accounts

redeemed ee bonds may be exempt from federal income tax if the funds are used to pay tuition and fees at a college or qualified technical school for yourself or for a dependent and if they were purchased by an individual who is at least 24 years old.

true

true or false: interest rate risk is the result of changes in the interest rates in the economy.

true

a joint account means:

two or more owners

the type of market risk that affects a specific company or industry is _______ risk.

unsystematic

the bank balance of the checking account is $500, the current balance in the checkbook is $325, bank fees are $25, and outstanding checks are the only additional item. how much are the outstanding checks?

$200

the typical dollar limit per person per financial institution for FDIC insurance is:

$250,000

assume FDIC insurance limits are $100,000. john and mary are married. john has a account with $40,00. john and mary have a joint account with $60,000. how much FDIC coverage does john require? remember john and mary have equal ownership of the joint account.

$70,000

Institutions typically offering online banking include:

-Internet-only banks -"brick and mortar" banks -savings and loans

Electronic banking allows a customer to:

-Payments for online purchases -Direct deposit checks -Transfer funds for online payments of mortgage payments or rent -apply and receive approvals for loan

a regular savings account usually does not have:

-a high rate of interest -a high balance requirement -overdraft protection

commercial banks offer services to:

-businesses -government agencies -individuals

what three actions should you NOT take if you are a victim of identity theft?

-locate the person who stole your identity -leave the area until the problem is resolved -call your friends and neighbors

"safe" investments include:

-select mutual funds -government bonds -certificates of deposit

joe invests $3,000 dollars. at the end of 10 years the investment is worth $3,300. what is the rate of return for the 10-year period?

10%

if you invested $5,000 four years ago and today the value of that money is $5,800, the rate of return for the entire period would be

16 or sixteen

traveler's checks required _______ signatures.

2

you are in the 25% tax bracket. so, the yield on the savings account is 8%, and the after-tax savings rate of return is:

6%

you are in the 25% tax bracket, the after tax savings rate of return is 6%, the before-tax yield on the savings account is:

8%

annual percentage yield is also commonly expressed as:

APY

certificates of deposit require that a certain amount be on deposit for a stated time period in exchange for

a higher interest rate

a regular savings account usually offers:

a low or no minimum balance requirement

which of the following is not true regarding ATM's?

all financial institutions charge the same ATM fees

the _______ is the percentage rate expressing the total amount of interest that would be received based upon time and compounding.

annual percentage yield

on an interest-bearing checking account, always compare the interest earned with:

any service fees

ee bonds are exempt from state and local taxes, but federal income tax is typically due:

at redemption

in a regular checking account, it is beneficial to:

avoid the monthly service charge

traveler's checks allow you to make payments when you are:

away from home

Deposit institutions would not include:

brokerage firm

an automated teller machine is oftentimes referred to as a "__________ machine."

cash, money, or bank

the savings alternative that offers less liquidity is:

certificates of deposit

which of the following is not considered a speculative investment?

certificates of deposit

_______ banks are organized as corporations, with individual investors contributing the capital for operations.

commercial

overdraft protection is designed to:

cover underfunded checks

if interest rates increase, the value of a bond will _______.

decrease

_______ deposits include checking accounts and other payment methods.

demand or checkable

the potential return on an investment should be:

directly related to the risk assumed

the amount of risk to assume is based upon:

each individual

most financial institutions impose a penalty for _______

early withdrawals of CD funds

the biggest advantage of using APY is:

easy to compare rates

a(n) _______ is your signature on the back of the check.

endorsement

when you sign the back of the check, this is a(n)

endorsement

true of false: since 1926 stocks have returned approximately 5%, while bonds have returned about 10% during this same time.

false

speculative investments assume a:

high level of risk

checking account fees have_______ in recent years.

increased

common choices for making payments include all of the following except:

installment loans

what risk is the result of changes in the interest rates of the economy?

interest rate risk

what type of financial institution typically does not have federal deposit insurance?

investment companies

an account with two or more owners is called a:

joint account

which of the following would not be a good choice when investing for investment income?

just any common stock

saving money for retirement would be considered a(n):

long-term goal

match the potential return on an investment to the risk.

low risk=low return medium risk=medium potential return high risk=high potential return

a drawback of u.s. savings bonds is:

lower rates for early redemption

a _______ fund is an account used for savings offered by investment companies.

money market

the savings alternative that offers more liquidity is:

money market accounts

changes in the market price for stocks are _______ to the financial health of the company itself.

not always related

_______ protection is less costly than paying a fee for an unfunded check.

overdraft

when banks merge, this may cause coverage for FDIC insurance to:

overlap

other than length of time invested, what other aspect significantly impacts future value?

rate of return

_______ checking accounts usually have a monthly service charge that you can avoid by keeping a minimum balance in the account.

regular, NOW, normal, most, or many

the rate of _______ can vary in percentage, yet every percent greater makes a significant impact on future value.

return or interest

the rate of _______ is the percentage increase in the value of savings as a result of interest earned.

return, interest, yield, or returns

certificates of deposit, government bonds, and certain mutual funds are all considered _______

safe or safer

Saving funds for future use is necessary for financial:

safety

a money market fund is a:

savings instrument

online payments do NOT include

smart cards

financial services will usually NOT be affected by:

stock prices

the rate of return is:

the percentage increase in the value of an account

Overdraft protection is an automatic loan made to checking account customers to cover checks written in excess of:

their balance

describe the relationship between the finances of a company and the market price of the stock.

they are not always correlated.

Which of the following is a service not offered by savings and loans?

trip planning services

Financial services can change due to such factors as changing interest rates and rising consumer prices.

true

it is vital to determine the amount of risk you are willing to assume.

true

market risk is the fluctuation of stock and bond prices due to the behaviors of investors in the marketplace.

true

redeemed ee bonds can avoid federal taxation if:

used to pay college tuition and fees

among other factors, a person's priorities, age, and _______ affect his or her investment goals.

values or goals

when looking at investment you should first ask yourself:

what is important to you and what do you value?

as an investor, you want to ask your real estate agent about which of the following?

-financing -taxes -building condition

benefits of u.s. savings bonds include:

-government guarantee -exemption from state and local taxes -low minimum deposit

drawbacks of money market accounts include:

-higher minimum balance required -some institutions charging for low balances

taxes can affect which of the following areas of investing?

-interest -dividends -rental income

for investment income, which of the following would be good choices?

-municipal bonds -preferred stocks -corporate bonds

the minimum record-keeping requirements consist of which of the following?

-records of income -records of dollar amount of investments -records of fees or commissions payed

which of the following are some of the typical asset classes utilized in asset allocation?

-small, medium, and large corporation stocks -foreign stocks -bonds

a $500 savings account that earned $25 after a year would have a rate of return, or yield, of _______ percent.

5


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