Chapter 6 Section 2-3 Quiz

What do treasury bills, treasury notes, and treasury bonds have in common?

All are issued by the federal government

The most risk - free investment is

An insured account in a local bank

People who act as go-between for buyers and sellers stocks and bonds

Broker

Increase in value of an asset from the time it was brought to the time it was sold

Capital gain

A major benefit of a private or personal pension plan is

Deferred federal income tax

Spreading of investments to lower overall risk

Diversification

The return a stockholder receives on the amount invested in a company is a

Dividend

Private retirement plan that allows people to save certain amount of untaxed income with tax-deferred interest

IRA

The interest earned on contributions to a Roth IRA

Is tax-free forever

Retirement plan for self-employed individuals

Keogh plan

Investing savings in several different types of accounts

Lowers overall risk

Company that pools the funds of many individuals to buy stocks, bonds, or other investments

Mutual fund

The trade-off for investing in real state is

Not being able to get your money back quickly

An electronic marketplace for stocks is the

Over the counter market

Company plan that provides for retirement income for workers

Pension plan

Private retirement plan that taxes income before it is saved

Roth IRA

Bonds issued by the federal government as a way of borrowing money

Savings bond

Which of the following is purchased half the face value?

Savings bond

Corporations are formed by

Selling stock

People who have invested in a corporation and own stock

Stockholders