Chapter 11 Personal Finance

rhodium

A lesser-known precious metal

direct investment

A real estate investment in which the owner holds legal title to a property he or she has purchased

c

An advantage of using the Internet for adding to a collection is a. low prices b. items are authentic c. access to sellers from around the world d. the opportunities to examine items closely

Ginnie Mae

An agency that sells participation certificates

c

An apartment building is considered a. an indirect investment b. a tax shelter c. a commercial property d. a real estate investment trust

syndicate

An association of investors organized as a corporation, trust, or limited partnership

participation certificate

An investment in a group of mortgages that have been purchased by a government agency

REIT (real estate investment trust)

An investment that works like a mutual fund butt invests in real estate or mortgage loans

indirect investment

An investment where a trustee is appointed to hold legal title to a property on behalf of an investor or group of investors

c

In the year 2003, an ounce of gold was worth about a. $35 b. $100 c. $360 d. $700

commercial property

Land or buildings that produce lease income

a

Participation certificates are issued by a. government agencies b. limited partnerships c. real estate syndicates d. the U.S. Treasury Department

d

Precious gems are rated for all the following characteristics except a. color b. weight c. clarity d. origin

precious gems

Rough mineral deposits that are dug from the earth and shaped into brilliant jewels

d

Since the 1980s, real estate syndicates have been less appealing to investors because a. inflation has risen b. property values have fallen c. rental rates have fallen d. the Tax Reform Act limited tax advantages

financial leverage

The use of borrowed funds for investment purposes

b

The value of a real estate investment may decrease if a. interest rates rise b. the economy declines c. inflation rises d. purchasing power decreases

c

What is the largest financial asset for most Americans? a. stocks b. bonds c. home ownership d. mutual fund

b

Which kind of investment offers the least diversification? a. syndicates b. land purchases c. hybrid REITs d. Freddie Macs

d

Which of the following is an indirect investment? a. buying land b. mortgaging a house c. building a vacation home d. purchasing a debt contract