PF

PE

Determined by dividing the last closing price of the stock by the earnings per share (EPS) for the year

Net change

Difference between closing price of previous day and current day.

Form 10-K (annual report)

Due within 90 days of the fiscal year-end. Contains audited financial statements

EDGAR

Electronic Data Gathering and Retrieval

EFT stands for: Electronic Funds Transaction Electronic Finance Transfer Electronic Funds Transfer

Electronic Funds Transfer

Mortgage Loan that is popular with first time homebuyers because they are easy to qualify for (you can qualify with bad credit), requires a low down payment and has low closing costs. USDA Loan FHA Loan VA Loan

FHA Loan

Commodities are generally viewed as a lower risk investment than stock and bonds. True False

False

Securities that are traded over-the-counter are traded on a centralized exchange. True False

False

Life Insurance that has no Cash Value Variable Universal Life Whole Life Universal Life Term

Term

Life insurance that is for a stated period of time. Whole Life Term Variable Universal Life Universal Life

Term

Which is the cheapest life insurance for a 25 year old? Universal Variable Universal Whole life Term

Term

Three roles of federal reserve

conduct the nation's monetary policy, provide and maintain an effective and efficient payments system, and supervise and regulate banking operations.

Since John wants to know the bond's interest rate, he needs to look at the bond's par value. issuer. coupon. maturity.

coupon

quote currency

currency on the right of the slash

When assessing a stock using fundamental analysis, an investor should consider ratios and other quantitative factors only. recent trends that might affect short-term price. qualitative and quantitative factors. a chart of the stock's price over the last year.

qualitative and quantitative factors.

When you study a company's business model, product mix, competition, and brand, you are studying objective characteristics. qualitative measures. quantitative measures. industry characteristics.

qualitative measures.

Market Cap for a Company represents the: dividend multiplied by the shares outstanding The maximum amount of daily sales of goods/services by the Company stock (market) price multiplied by the shares outstanding maximum amount of shares a Company can sell

stock (market) price multiplied by the shares outstanding

Blend funds

Blend funds contain both growth and value stocks

Net Asset Value =

(Market Value of Assets - Liabilities) / Shares Outstanding

Perfect PEG ration =

1

Jim invested $12,000. He received $144 interest on his investment in the first year. What was his rate of return on this investment? 1.2% 10% 83.3% 12%

1.2%

Susan invested $10,200 in Duke Energy stock. One year later the market value of her Duke Energy stock was $11,812. What was the rate of return on her investment? 24.3% 21.2% 15.3% 15.8%

15.8

If you report your debit card lost or stolen within two days, the Electronic Fund Transfer Act limits your liability for unauthorized transactions to: $50 $25 $0

50

Bond Funds

Mutual funds that invest primarily in bonds

What is a good definition of a derivative? A contract to borrow money for a business The principal amount of debt between two parties A contract between two or more parties whose value is based on an agreed-upon underlying financial asset The difference between the cost and value of stock

A contract between two or more parties whose value is based on an agreed-upon underlying financial asset

Pegged currency

A currency based on the fixed exchange rate of another country's currency.

Free-floating currency

A currency with a value determined by the foreign exchange market

income statement

A financial statement showing the revenue and expenses for a fiscal period.

Inflation targeting

A government's pursuit of a specific inflation rate

Price stability

A situation in which prices dont change rapidly and the value of money is stable

Deflation

A steady decrease in price levels over time

Inflation

A steady rise in price levels over time

How are ACHs different from EFTs? ACH's are processed in batches ACHs are quicker than EFTs ACHs are used for credit card transactions

ACH's are processed in batches

Shares Outstanding for a Company represents the: Actual number of shares the Company has not yet sold Actual number of shares owned by the Company Actual number of shares owned by investors Actual number of shares traded each day

Actual number of shares owned by investors

Which of the following is not likely to cause a stock's price to fluctuate: Removal from the S&P 500 A well-known analyst's recommendation to buy Addition to individual investor's portfolio A fund manager's sale of stock

Addition to individual investor's portfolio

For which investment will you receive Interest payments? Bonds Stock Currency

Bonds

Which investment will pay interest to the investor. real estate bond stock insurance

Bonds

Where is the routing number on your check? Bottom right Bottom left Top left Top right

Bottom left

What are the two types of traders that trade commodity futures? Governments and consumers Buyers/producers of commodities and speculators New investors and stock exchanges Debt and equity markets

Buyers/producers of commodities and speculators

Which is NOT an advantage of Online Bill Pay? Convenience Cash rebates Potential to cut costs Reliability

Cash rebates

The bank withdraws funds from your personal account and cuts a check from the bank to pay the receiver on your behalf Cashier's check Money Order Certified check

Cashier's check

This investment is issued by a bank and guarantees a set rate of return over a specific period of time.

Certificate of deposit

A personal check that you write that the bank guarantees by verifying funds are in your account and placing a hold on these funds. Cashier's Check Money Order Certified Check

Certified Check

Commission fees associated with mutual funds are known as ETFs. NAVs. loads. expense ratios.

loads

Which federal agency is responsible for collecting complaints about identity theft & also prevents fraudulent, deceptive, and unfair business practices? Federal Identity Theft Agency Federal Trade Commission Federal Complaint Commission Federal Bureau of Investigation

Federal Trade Commission

FINRA

Financial Industry Regulatory Authority

What market are Commodities traded on? Debt Futures NYSE Primary

Futures

What market are Commodities traded on? Debt Stock Futures Index

Futures

Uncounted production

Goods and services that are not counted in GDP because money is not paid for them

Which of the following is considered the most reliable bond: Corporate Puttable Government Callable

Government

GDP

Gross Domestic Product- the total market value of all final goods and services produced annually in an economy

Which of the following would provide you with information about the health of the U.S. economy: Gross domestic product Economic order quantity Population data Medium of exchange

Gross domestic product

Growth funds

Growth funds invest in stocks that are most likely to appreciate in value over the short term.

Hyperinflation

High or unexpected inflation

What is NOT a type of insurance for everyone? Long-Term Disability Coverage Life Home Health

Home

What happens when institutional investors purchase a number of stocks from the same company? The company introduces a new business model. Individuals purchase stocks from the company. Analysts recommend that investors sell their stocks from the company. The company introduces a new product.

Individuals purchase stocks from the company.

International funds

International funds invest in stocks from overseas companies and are often viewed as the highest risk stock funds because of political and currency fluctuation in foreign markets.

Which of the following best describes the relationship between bonds and the stock market: Inverse Liquid Beneficial Straight

Inverse

close

Last price for the day

Which level of profit margin considers all the costs of doing business, such as salaries, rent, and utilities, and the direct cost of bringing a product or service to market? Gross profit margin Operating profit margin Pre-tax profit margin Net profit margin

Operating profit margin

If you write a personal check for an amount that is more than the balance in your checking account, you may be liable to pay a: Overbalance fee Overdraft fee ATM fee Over the limit fee

Overdraft fee

The person the check is written to is called the : Receiver Payor Payee Recipient

Payee

Which is not an example of a EFT: Direct deposits Personal checks ATM transactions

Personal checks

The annual cost of Life Insurance is called the: Obligations Tuition Rates Premiums

Premiums

The annual cost of Life Insurance is called the: Premiums Obligations Tuition Fees

Premiums

Supply shock

Prices going up because commodities are limited

Demand-pull inflation

Prices going up because money supply grows faster than the economy

Two types of Capital markets are the: Primary and secondary markets Spot and futures market

Primary and secondary markets

Which is an example of a stock index? Technology Amazon S&P 500 Bloomberg

S&P 500

Used by bank customers to keep valuables, important documents, and sentimental keepsakes protected at the bank. Vaultbox Safe Deposit Box LockBox Safe Banking Box

Safe Deposit Box

Sector funds

Sector funds invest in stocks from one specific industry, such as oil.

In investing, legal lending or owning agreements between individuals, businesses, or governments are known as securities. guarantees. contracts. bonds.

Securities

anual percentage rate

The cost of credit expressed as a yearly interest rate

base currency

The currency on the left of the slash

Credit limit

The maximum amount of charges allowed to an account

Consumer Price Index

The most well-know inflation-monitoring tool

Currency exchange rate

The value of one countrys money in relation to another's

Savings account

This investment allows easy access to the investor's money but earns a very low rate of return.

Mutual funds

This investment allows the investor to access the expertise of a professional investment manager

Investments are less liquid than a savings account True False

True

How much a stock sells for depends directly on which of the following: What buyers are willing to pay for the stock How high the company's earnings are The popularity of the company's new product How volatile the stock is

What buyers are willing to pay for the stock

Which of the following is a true statement about certificates of deposit: You must pay a penalty for withdrawing your money early. The riskiest investment is a certificate of deposit. Certificates of deposit may depreciate in value. Certificates of deposit are issued by corporations or governments.

You must pay a penalty for withdrawing your money early.

mutual fund

a collection of shareholders' money that is invested (by professional fund managers) in an assortment of different securities

What is the role of a financial intermediary? acts as insurance between two parties in a financial transaction Supervises banking activity establishes monetary policy acts as the middleman between two parties in a financial transaction

acts as the middleman between two parties in a financial transaction

rate of return

determined by dividing the dividend by the current stock price

The PEG ratio is unique because it incorporates price, earnings, and growth of sales. gross profit. growth of price-earnings. growth of EPS.

growth of EPS.

Cyclical stock

has a market value that tends to reflect the state of the economy

52 week high/low

highest and lowest prices paid for the stock in a year

Balanced Funds

invests in both stocks and bonds

Balance Transfer

moving a balance from one credit card account to another

Index Funds

mutual funds that mirror the composition of a particular market or index

Producer Price Index

A tool that monitors prices at the producer and wholesaler levels

Anual Fee

A yearly fee that may be charged for having a credit card

Net Asset Value

Amount that one share of a mutual fund is worth

Cost-push inflation

An unexpected event that increases cost and prices

equity =

Assets - Liabilities

How does a bull market affect a stock's price? By avoiding investment scams By promoting well-performing funds By encouraging product purchases By discouraging product purchases

By encouraging product purchases

In what way can the general state of the economy affect a stock's price? By filtering out poor investments By increasing supply or demand By making investment information available to the general public By bringing together a balanced portfolio

By increasing supply or demand

Which of the following is a company-specific influence on a stock's price: Government action Change in management Investor action Change in supply or demand

Change in management

Which of the following represents one way assessing a mutual fund is different from assessing a stock: Investors' goals are important, not their abilities. Minimum investment requirements are low. The market reflects the company's growth potential. Combined value is important, not individual value.

Combined value is important, not individual value

Which of the following is an important business factor to consider when choosing an investment: Time horizon Company's comparison to competition Risk tolerance Minimization of taxes

Company's comparison to competition

Which is NOT an example of a Commodity? Gold Corn Computers Coffee

Computers

Which of the following is not a loan to a governing body (Government): Municipal bond Savings bond Treasury bond Corporate bond

Corporate bond

Foreign exchange market is also called

Currency Market

Form 10-Q (quarterly report)

Due within 45 days of the end of the quarter. Financial statements can be unaudited

Regarding stock investments, which of the following primarily drives investors' actions: Expectations Recommendations Information Performance

Expectations

Menu costs

Expenses involved in changing prices

Mortgage Loan that is popular with first-time homebuyers because they are easy to qualify for (you can qualify with bad credit), requires a low down payment and has low closing costs. VA Loan Conventional Laon FHA Loan USDA Loan

FHA Loan

What does FINRA do

FINRA writes and enforces rules and regulations for every brokerage firm and broker and assesses fines against brokers or firms for violating these rules.

If the Federal Reserve is concerned about lack of consumer demand and a threat of recession, they will take action to decrease the supply of money? True False

False

Investing in bonds has more risk than an investment in stocks

False

If you have an optimistic (positive) view on the future value of a stock, you would take a __________ position in the stock. Short Long

Long

Which part of a check is optional? Memo Date Dollar amount Signature

Memo

Which Financial Market has lower risk? Money Market Capital Market

Money Market

In which Financial Market are assets traded highly liquid, being near-equivalent to cash, and generally have a redemption period (payout) of less than one year. Money market Capital Market Currency Market

Money market

Which statement is TRUE of mutual funds? Mutual Funds reduce investment risk through diversification Mutual funds are never superior to purchasing a single stock Mutual Funds are a form of real estate investment Mututal Funds are speculative investments

Mutual Funds reduce investment risk through diversification

Money Market Funds

Mutual funds that invest in short-term, low-risk securities and allow investors to write checks against their accounts

Which of the following best describes a marketable bond: One that is bought and sold in the open market One that is issued by a governing body One that is paid back before maturity One that becomes a stock at a later time

One that is bought and sold in the open market

What does an income statement show about a company over a period of time? Reliability Liabilities Equity Profitability

Profitability

Which of the following are methods that countries use to control their trade with other nations: Quotas, tariffs, and subsidies Product standards, admission fees, and licenses Tariffs, economic sanctions, and royalties Embargoes, surplus charges, and product standards

Quotas, tariffs, and subsidies

Who created the EDGAR electronic filing system? Securities and Exchange Commission Southeastern Conference Banking Commission US Treasury Dept.

Securities and Exchange Commission

If I want to buy Currency TODAY and take possession of it TODAY, I will use the : Futures market Spot market

Spot market

Of the following ownership investments, which allows access to an "expert" manager: Real estate Stocks Collectibles Stock mutual funds

Stock mutual funds

What is the difference between a stock's ask price and buy price? The ask price is usually higher than the buy price. The buy price is the sell price, while the ask price is the bid price. The ask price is the sell price, while the buy price is the bid price. The ask price and buy price are usually equal.

The ask price is the sell price, while the buy price is the bid price

Which of the following is a true statement about industries and sectors: The economy is divided into sectors. Industries are divided into sectors. The economy is divided into industries. Industries are divided into general categories.

The economy is divided into sectors.

Kent wants to learn as much as possible about the mutual fund he's thinking of investing in. Which of the following is the best place he could go for detailed information: A trade magazine The newspaper The fund's web site The fund's prospectus

The fund's prospectus

Pentalty APR

The interest rate charged on new transactions if the penalty terms in the credit card contract are triggered

introductory rate

The interest rate that may be charged right after a credit card account is opened

Standard of living

The level of material comfort consumers are used to

Stocks

This investment gives the investor the right to vote at company meetings, earn a portion of the company's profit, etc.

Bonds

This investment is issued by a government or corporation and is very low risk

Collectables

This investment is risky because there's no guarantee that future investors will place a higher value on certain items

Money Market Account

This investment is similar to a savings account but may require a minimum balance

Real estate

This is a very common investment—its main risk is depreciation.

Which of the following is a cyclical stock: US Concrete (RMIX) Triad Hospitals Inc. (TRI) Southwest Water Co. (SWWC) Colgate-Palmolive Co. (CL)

US Concrete (RMIX)

If you are buying a house in a rural area, your best option for a mortgage is likely a: FHA Loan VA Loan USDA Loan

USDA Loan

Value funds

Value funds invest in stocks that seem to be undervalued or overlooked.

VOL

Volume or Sales for the previous day

The Coca-Cola Company's brand, which is valuable and known world-wide, is not reflected in book value because it is a hard asset. an intangible asset. property and equipment. part of stockholders' equity.

an intangible asset

Dividing investment funds among broad categories of assets like stocks, bonds, and mutual funds is called implementation. asset allocation. investment averaging. selection strategy.

asset allocation.

When Janine wants to know what others are willing to pay for a bond she owns, she looks at the coupon rate. bid price. bond rating. issuer.

bid price.

The biggest traders of currency on the foreign exchange market are commercial and investment banks. individuals. governments. businesses and corporations.

commercial and investment banks.

An exchange rate quotation that uses domestic currency as the base currency is known as a(n) __________ quotation. direct indirect home free-floating

direct

Glenn has committed to investing $100 each month to buying shares of his favorite stock, Microsoft. Last month, when the stock price was $22, he bought 4.54 shares. This month the stock price is $25, so he bought just four shares. This strategy is called buy-and-hold. growth investing. dollar cost averaging. diversification.

dollar cost averaging.

A country's gross domestic product is expressed in percentages. the number of transfer payments. dollars. the number of items produced.

dollars.

Form 8-K (current report)

due within 15 days of the major event date. Financial statements can be unaudited

Dividends

earnings distributed to stockholders

Non-profit organizations often pool and invest donated money in: endowment funds. savings accounts. certificates of deposit. money market accounts.

endowment funds.

personal consumption expenditures

expenditures by consumers on goods and services

Publicly-traded companies are required by law to provide yearly newsletters. stock research. financial statements. company report cards.

financial statements.

Return on equity (ROE) measures management's ability to make a profit by becoming shareholders of smaller firms. from the money generated by sales. from the money that shareholders have invested. by becoming more efficient in operations.

from the money that shareholders have invested.

Studying all aspects of a company to discover its intrinsic value is called __________ analysis. investment technical economic fundamental

fundamental

A PE ratio of 20 means that investors are willing to pay $20 for every dollar of earnings. the stock price is approximately $20 dollars more than it should be. investors earn $20 for every dollar they invest. the company has a profit margin of 20%.

investors are willing to pay $20 for every dollar of earnings.

The price-earnings (PE) ratio measures stock price compared to sales. stock price compared to shareholders' equity. management's ability to streamline operations. investors' expectations about a company's performance.

investors' expectations about a company's performance

Pre-tax profit margin is a good measure of management's performance because pre-tax profit margin is calculated by dividing pre-tax profit by sales. a growth company's sales and EPS grow at a rate greater than that of the market. managers have control of all of the expenses up to the point of taxes. the percentage can be interpreted as the amount of each sales dollar left before taxes are paid.

managers have control of all of the expenses up to the point of taxes.

Qualitative factors

non-measurable factors that may influence business decisions

Exchange-Traded Funds

offshoots of mutual funds that allow investors to trade index portfolios

The stock table term PE stands for price-expenses ratio profit-earnings ratio price-earnings ratio percentage-earnings ratio

price-earnings ratio

intermediate products

products used to make other products already counted in GDP

Stocks are traded between investors in the stock exchange in which Market? Secondary Primary Principal

secondary

Quantitative measures such as ratios are helpful because they: show the relationship between numbers on a company's financial statements. are figured the same way no matter what the source. do not have to be used in context. can be used to compare companies in different industries.

show the relationship between numbers on a company's financial statements.

Global trade

the exchange of goods or services between individuals, organizations, or governments of different nations

closed-end fund

the fund has a set number of shares it can issue, determined before it's ever established.

exchange rate

the value of a currency in one country compared with the value in another

Open-end mutual funds

there is no limit on the amount of shares the fund can issue or the amount of money it can hold

Quantitative factors

these are measurable in financial terms and will have a direct impact on either the costs of a site or the revenues from it and its profitability

Fundamental analysis estimates the value of a stock primarily so that investors can tell if it is undervalued or overvalued. competitive or noncompetitive. a short-term or long-term investment. run by effective managers.

undervalued or overvalued.

Stocks whose prices rise higher than, or fall lower than, the market as a whole are referred to as efficient. volatile. influential. successful.

volatile.

What return a bond brings you over a period of time at a particular price is called the bond's maturity. bid price. yield. liquidity.

yield

Variable rate APR

An interest rate that may change depending on other factors, such as the prime rate

A type of market in which transactions are batched together and executed at predetermined time intervals Call Market Bond Market Continuous Market Financial Market

Call Market

If you sell an investment for a price greater than you bought it for - you have a: Speculative gain Capital gain Commodity gain Securities gain

Capital gain

Equity is traded in which Market? Money Market Currency Market Capital market

Capital market

over the limit fee

Charged if the account balance goes over the credit limit

Late payment fee

Charged when a cardholder does not make the minimum monthly payment by the due date

These are extra fees that are charged when you buy a home. They can be between 2% - 5% of the total mortgage amount. Down Payment Closing Costs Mortgage insurance

Closing costs

Which of these is considered the "Central Bank" of the United States? the Federal Reserve Bank of America the New York Stock Exchange the SEC

the Federal Reserve

What is the ABA Routing number on a check? serves as an "address" for your bank serves as your account number with the bank serves as a verification of the check amount serves as a the account number for the payee

serves as an "address" for your bank

What should always be the last step in writing a check: signing the check writing the payee's name dating the check writing the amount of the check

signing the check

Value Stock

stock from a company which has a low market price considering historical earning records and value of current assets

An investor enters into a one-year future contract to buy 500 bushels of corn at $100 a bushel ($50,000 value). If the price of corn is trading at $115 a bushel at the end of one year, what is the value of the Derivative (future contract for corn)?

7500

Growth stock

A stock from a company which has a consistent record of relatively rapid growth and earnings in all economic conditions.

A bond is: A type of debt that a company issues to investors for a specified period of time. A type of investment that is only offered by depository institutions. A share of ownership in a company. A type of investment that has the potential for significant fluctuations over a short period of time.

A type of debt that a company issues to investors for a specified period of time

Speculative stock

A very high risk stock from a company with potential for substantial earnings in the future.

From the demonstration you watched in today's lesson - Which is a category of Commodities? Healthcare Agriculture Technology Entertainment

Agriculture

Which is a true statement: ACHs are not EFTs All ACH's are EFTs All EFTs are ACHs

All ACH's are EFTs

A type of market where traders can trade on an ongoing basis when the market is open. Foreign Market Call Market Continuous Market Financial Market

Continuous Market

What is the role of Monetary Policy? Insuring bank deposits in order to promote stability and economic growth Loaning money to businesses to promote stability and economic growth Controlling money supply to promote stability and economic growth Adjusting the foreign exchange rate to promote stability and economic growth

Controlling money supply to promote stability and economic growth

Mortgage Loan that is NOT backed by a government agency. Conventional Loan USDA Loan VA Loan FHA Loan

Conventional Loan

Mortgage Loan that is NOT backed by a government agency. Conventional Loan VA Loan FHA Loan

Conventional Loan

In which Financial Market is there a Spot market and a Futures market? Capital Market Money Market Currency Market

Currency Market

Insurance that is purchased to protect you financially from being sued by others is called? Disability Insurance Liability Insurance Property Insurance Health Insurance

Liability Insurance

If you own Apple stock that you have paid for, you have a ________ position in Apple stock. Long Short

Long

What type of insurance provides protection in the event you are unable to work due to injury or illness? Unemployment Health Long-Term Disability Life

Long-Term Disability

Which is NOT a benefit of using a credit card? Develop positive credit history Low interest rate Convenient payment tool Credit card bonuses

Low interest rate

The price at which you can purchase a share of stock is called: Purchase value Net Value Market value Gross value

Market value

Prepaid paper certificate that you can buy at lots of different places, including post offices and grocery stores as well as banks and credit unions Cashier check Money order Certified check

Money order

Which will provide you more alternatives (options) when obtaining a Mortgage Loan? Mortgage Lender Mortgage Broker

Mortgage Broker

Which is an advantage of using online bill pay services? Earning interest Rebates Reliability Cash rewards

Reliability

Commodities are generally viewed as a higher risk investment than stock and bonds. True False

True

Debt securities (Bonds) are typically traded Over-the-Counter (OTC). True False

True

Stocks that trade via OTC are typically smaller companies True False

True

A full service brokerage firm will typically charge a greater fee than a discount brokerage firm

True

Insurance that has a flexible premium structure and will build cash value over time that grows at a rate determined by the insurance company. Universal Life Whole Life Variable Universal Life Term

Universal Life

Stock Traded Over- the - Counter (OTC) are: Unlisted Listed

Unlisted

This mortgage loan is only available to qualifying military veterans. USDA Laon VA Loan FHA Loan

VA Loan

Life insurance that has a Cash Value that is invested in Mutual Funds Variable Universal Life Whole Life Universal Life Term

Variable universal life

What is an example of a peer-to-peer payment? Visa Personal check Venmo

Venmo

What is a good description of a Commodity? a basic good the extremely rare and unusual a basic good used in commerce that is interchangeable with other goods of the same type a basic good that is typically sold in retail stores a basic good that is in unlimited supply

a basic good used in commerce that is interchangeable with other goods of the same type

Defensive stock

a stock that remains stable during declines in the economy

Who needs Life Insurance? anyone who had a job anyone who owns a home anyone who has financial dependents anyone over the age of 25

anyone who has financial dependents

When is the market value of a mutual fund determined? on an annual basis - once a year at the beginning of the day when the market opens it continually changes through the day as the mutual fund is traded at the end of the day when the market closes

at the end of the day when the market closes

A Mortgage Broker is probably a good option for: borrowers with poor credit borrowers with good credit

borrowers with poor credit

The main benefit of EFT is: it provides better documentation it is less expensive it speeds money movement

it speeds money movement

Income Stock

pays higher-than-average dividends compared to other stock issues

Blue Chip stock

the stock of a large, well-established and financially sound company that has operated for many years