689 consumer ed

A dividend is NOT actually a share of a company's profits.

false

The unit of ownership in a corporation is a

share of stock

Interest paid annually at the end of the year on the average balance in a savings account is

simple interest

A person who handles the transfer of stocks and bonds between buyer and seller is known a

stockbroker

You have joined an investment club. The other members of this club have asked you to obtain information on a specific mutual fund. You will need to know how the fund is operated; the fund's investing objectives and strategies; and the fees that it charges. What publication will provide you with that information?

the fund's prospectus

Last year, you purchased 100 shares of stock at $30 per share. Today you sold the stock for $20 per share. What was you capital loss on this investment?

$1000

if Joe bought 300 shares of stock last year at $3 per share and sold them today for $4 per share, his capital gain would be

$300

A tax-deferred retirement savings plan offered to employees by their employer is a(n

401k

Minako works for a large appliance manufacturing company that offers a tax-deferred retirement savings plan to each of its employees. Minako invests $50 from each of her paychecks in the plan; her employer matches her investment $.40 for each dollar. This type of plan is known as a ____.

401k plan

If interest at 6 percent is compounded annually on Carlos' $500 savings account, which of the following will he have in his account at the end of two years, assuming that he withdraws nothing during the two years?

561.80

Kameelah worries about inflation reducing the purchasing power of her savings. To avoid this possibility, she has decided to purchase a type of U.S. government savings bond called a

I Savings bond

Denise operates a successful home-based business. She wants to start a retirement savings plan for herself in which her retirement savings are tax-deferred until she retires and is in a lower income tax bracket. This type of savings plan is known as a(n)

IRA

Hunter buys and sells stocks through a broker in his home town. His broker has a membership in an organization that allows him to complete stock transactions electronically. This system is known as the

NASDAQ

Cynthia and Doug know that the FDIC insures deposits in commercial banks up to $250,000. The agency that insures deposits for credit unions is called the

National Credit Union Share Insurance Fund

I have a low tolerance for risk, but I would like to invest in some type of mutual fund. Which of the following is my best choice?

a mutual fund that invests in blue chip stocks

A written promise to pay a debt by a specified date is called a

bond

Marlan has accumulated $500 in his savings account; however, he is earning only 2.25 percent simple interest on his savings. He would like to take all or part of his savings and invest in some type of account that would pay him a higher interest rate. Given the amount he has to invest, which of the following would be his best choice?

certificate of deposit

Perry has purchased voting shares of stock in a corporation. The dividend he receives is determined by the corporation's board of directors. What type of investment does Perry have?

common stock

The voting share of stock that does not receive a set dividend is called

common stock

Mui Thi has deposited $500 into a savings account at her local bank. She will earn interest on the principal as well as on any previously earned interest. What type of interest will Mui Thi receive?

compound interest

Financial institutions that offer memberships to people who share a common bond, such as people in a particular profession, company, or labor union, are ____. This institution typically pays higher interest and has lower fees than competitors because it's not for profit.

credit unions

Authorizing your employer to place a certain amount of each paycheck into your savings account is called a

direct deposit

At savings banks, depositors earn ____________________ rather than interest

dividends

A credit union is a financial institution that serves all individuals and businesses with a wide variety of accounts, loans, and other financial services.

false

Stock trades on the New York Stock Exchange are completed

in one central location

A sales fee that you pay when you buy or sell a mutual fund is a

load

A group of investments owned by many investors is a

mutual fund

If you want to diversify your investments to reduce your risk, you might decide to participate with many other investors in an organization that owns stock in many businesses that have a variety of risks. What type of investment plan would you choose?

mutual fund

Which of the following is likely to be an uneven fixed expense?

paying your car insurance

Early withdrawal on a CD is usually subject to a

penalty

A nonvoting share that pays a fixed dividend is called

preferred stock

The money you deposit in a savings account, CD, or other saving option is called the

principal

Vikki placed $3,000 in a certificate of deposit for a one-year period of time. At the end of the year, she had earned $150 in interest on her investment. Her original $3,000 is known as ____.

principal

Lucas and Jewel have a down payment for a home and have found the home they want to purchase. Which type of financial institution specializes in lending money to consumers to buy homes?

savings and loans associations

Which of the following specializes in lending to consumers who want to buy homes?

savings and loans associations

Coop lives in a city where there are several types of financial institutions from which to choose. He has $5,000 to deposit. He would prefer to own part of the institution where he makes his deposit in order to receive dividends. Which institution matches his preferences?

savings bank

As a real estate agent, Allegra receives monthly commission checks. This month her commission check will be over $5,000. She wants to place the entire $5,000 in a safe investment for six months. Given the amount she has to invest and her preferences, what would be her best choice?

treasury bond

Almost all deposits are insured by a federal government agency.

true

The Securities and Exchange Commission is responsible for enforcing federal laws concerning the trading of stocks and bonds.

true

When you save, you trade spending now for the ability to spend in the future.

true