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