Personal Finance Unit 3

How are stocks of well-established, profitable companies classified?

Blue chip

what has an effect on stock value? A. interest rates B. the market C. the company D. All of the above

D

A corporation's profits never translate into dividend payouts to stockholders

False

Jimmy was comparing a simple interest account to a compound interest account and decided that he would earn the most interest by selecting the simple interest account

False

Most people invest money to avoid risk and to be completely safe

False

Typically, a regular savings account pays much more interest than a certificate of deposit.

False

explain the effect risk has on how much money you will earn in your investment

They may not earn enough over time to keep pace with the increasing cost of ... What Is Risk? When you invest, you make choices about what to do with your financial ... Another risk factor is tied to how many or how few investments you hold. ... you have in one basket, say all your money in a single stock, the greater risk you ...

A public corporation may extend itself beyond bonds by selling stocks

True

Casey explained to Josh that his financial institution pays him interest so they can use the money in his savings account.

True

Diversification can help an investor extend his investment portfolio to limit risks

True

Inflation affects investment strategy

True

Liquidity is a major advantage to regular savings accounts

True

Money compounded quarterly earns more total interest than money compounded annually.

True

Preferred stockholders take more risk than common stockholders

True

The amount of risks you're willing to take when investing relates to the amount of potential gain or loss

True

When comparing certificates of deposits to savings accounts one would say certificates of deposit are less liquid.

True

When you buy bonds you are loaning money to the government a corporation

True

what are the differences between a certificate of deposit and a savings account

While a CD will typically have a higher interest rate than a savings account, and sometimes even money market accounts, it will also have a penalty for making a withdrawal before maturity.

the date on which a certificate of deposit is due is called the ___.

maturity date