PFP unit 6
Benito placed $11,500 in a mutual fund with a 3.5% front-end load. How much money did he actually invest in the fund after accounting for the load?
$11,097.50
For 2017, IRA contributions are limited to __________ if you are under the age of 50.
$5,500
How much did Jennifer pay in FICA withholdings in 2017 if she was self-employed and made $55,000 in gross taxable income during the year?
$8,415.00
Forty years ago there were __________ workers for every person drawing Social Security. Today that ratio is __________ workers for every person drawing Social Security.
16;3
Haven has invested in a mutual fund. The net asset value at the time of purchase was $254.50 and he sells the fund two years later for $275.00. Additionally, during the time that he owns the mutual fund, he receives dividends of $12.50 and capital gain distributions of $15.75. What is Haven's return on this investment?
19.16%
A type of tax-deferred retirement plan offered by many large employers that allows employees to manage their own retirement plan is known as a:
401 (k) plan.
Jessica purchased 100 shares in a mutual fund at an NAV of $23.45. She held the fund for one year and received a dividend of $2 during that time and a capital gains distribution of $4.22. What is her total percentage return if she sold her shares for an NAV of $27.10?
42%
A tax-advantaged savings plan sponsored by individual states that allows withdrawals for college and graduate school expenses is known as a:
529 plan.
For Americans born after 1960 the Social Security retirement age to receive full benefits is:
67
Individuals that are not self-employed will have a total of __________ withheld from the first $127,200 of gross salary in 2017.
7.65%
You are legally required to take minimum distributions from your retirement accounts by April 1 of the year after you turn:
70.5
At this point in time there are approximately __________ mutual funds that specialize in all different types of financial assets.
8,000
Mutual fund loads, or sales fees, can be as high as:
8.5%
Approximately __________ of all Americans are covered by Social Security.
95%
An investment vehicle that pools investor funds and invests the proceeds in real estate or mortgages is known as a(n):
REIT
An individual retirement account (IRA) where contributions are made with after-tax income but earnings and withdrawals are tax free is known as a:
Roth IRA
Which of these investments is an appropriate asset for a money market mutual fund to hold in its portfolio?
U.S. Treasury bills
A(n) __________ fund will hold stocks, bonds and also preferred stock.
balanced
A __________ fund invests primarily in long-term debt.
bond
A(n) __________ cannot issue new shares in response to investor demand.
close-end fund
Most retirement plans are tax-deferred which means:
contributions and earnings are not taxed until you withdraw them at retirement.
As the number of retirement savings options increases the participation rate:
decreases.
A traditional pension plan that pays a specific amount at retirement based on a formula payout is known as a:
defined-benefit plan.
The first step in retirement planning is to:
determine what you want to do in retirement.
ETF's can be bought and sold:
during normal trading hours just like a stock.
A high risk, largely unregulated investment fund for wealthy investors is called a:
hedge fund.
A diversified stock mutual fund will help you eliminate the risk associated with:
holding individual assets.
A __________ provides payments to you during your lifetime, and your spouse if they outlive you. The spousal benefits can be the same amount or at some reduced amount.
joint and survivor annuity
A type of mutual fund that attempts to tailor its holdings to an investor's age and tolerance for risk is known as a(n):
life cycle fund.
A sales commission charge on a mutual fund is referred to as a(n):
load.
If you elect to receive all your retirement benefits in a single payment it is known as a:
lump-sum option
When an organization has a funded pension plan the organization:
makes regular contributions to a trustee that will administer the retirement fund.
Mutual fund advisors are compensated by:
management fees.
A description of a specific mutual fund that lists the fund's objectives, risks and other information is known as a(n):
mutual fund prospectus.
An investment vehicle that pools money from a number of investors and then invests those funds in stocks, bonds, or some financial asset is known as a(n):
mutual fund.
A mutual fund that does not charge any sales commission is called a:
no-load fund.
Most defined-benefit plans are:
not adjusted for inflation.
Which of these is a decision factor you should use when evaluating different mutual fund investments?
personal goals
Which of these is an advantage of mutual funds?
professional management
__________ are based on the firm's profitability so contributions can vary substantially from year to year.
profit-sharing plans
Mutual funds that typically invest at least 2/3rds of their assets in a specific industry are known as:
sector funds.
When an investor wants to sell shares in an open-end mutual fund they:
sell them back to the mutual fund at the net asset value.
If your employer offers to match the first 5% of your retirement contributions you should:
sign up immediately.
Retirees in the lowest income brackets receive the majority of their retirement income from:
social security.
Social Security is designed to:
supplement your retirement income.
One measure of a mutual fund's trading activity is the:
turnover ratio.
In order to generate sufficient retirement funds you should begin investing:
upon graduation from college if not sooner.
If you have worked at a firm long enough to be eligible for a pension you are considered to be:
vested.
Women need to save more money for retirement since they:
will. live on average 7 years longer than men.
