PF- 4 Overview of Investing, Stocks, & Financial Planning- 11/7/17(Tue.)- Q: 2- Investing

PF- Q 2: Read the following stock quote. How much is this stock worth? Wal-Mart Stores, Inc. (NYSE:WMT) 56.14 (up) 0.72 (1.30 percent) 10:42AM ET

- .72 - $10.42 - $56.14 - $14 answer:

PF- Sec. 2: Choose all that apply. Which of the following should be considered when selecting a stock?

- 52-week high - stock symbol - 52-week low - P/E ratio - commission - dividend answer: - P/E ratio - 52-week high - 52-week low - dividend

PF- Q 2: Edmund would like to sell stock. What should he do?

- He should visit the stock market and sell the stock. - He should go to his bank and fill out the necessary documents. - He should go online to www.NYSE.org and sell stock. - He should let his broker know that he wants to sell. answer:

PF- Sec. 2: Edmund would like to buy stock. What should he do?

- He should visit the stock market, open an account, and purchase stock. - He should go to his bank and fill out the necessary documents. - He should go online to www.NYSE.org and buy stock. - He should choose a broker, open an account, deposit money, and communicate with the broker about what stock he wants to buy. answer: - He should choose a broker, open an account, deposit money, and communicate with the broker about what stock he wants to buy.

PF- Sec. 1: Choose all that apply. Select all of the types of retirement accounts.

- IRA - mutual fund - IDA - 401(k) - 403(b) - CD answer: - 401(k) - 403(b) - IRA

PF- Sec. 1: Miranda thinks she's ready to invest in the stock market. What should she have done to prepare?

- She should have paid off credit card balances, saved up an emergency fund, and learned the basics about investing. - She should have learned about all types of investing, even the most complicated investment types. - She should have invested in a mutual fund. - She should have purchased a home and saved enough to live for three to six months. answer: - She should have learned about all types of investing, even the most complicated investment types.

PF- Sec. 2: A stock quote is advice from a broker about what stock to invest in.

- True - False answer: - False

PF- Sec. 3: There are not one set of principles or rules about savings and investing that everyone can follow.

- True - False answer: - False

PF- Sec. 1: A real estate investment is as safe as putting your money in a savings account.

- True - False answer: - False risky because the value of land and houses may decrease, or real estate may become difficult to sell

PF- Q 2: The rate of return is the money that is returned to you when you sell an investment.

- True - False answer: - False (guess)

PF- Q 2: Investing in collectibles is very risky.

- True - False answer: - True

PF- Sec. 3: Mutual funds are the riskiest type of investment.

- True - False answer: - True

PF- Q 2: Holly has many different types of investments. She does not understand a few of her investments. She's having a hard time figuring out their value and whether or not she should sell them. What principle of saving and investing should Holly have followed?

- Understand your risk tolerance. - Diversify. - Keep investments simple. - Look at past performance. answer:

PF- Sec. 3: Diversification means that you invest in _____.

- a variety of types of investments in order to minimize risk - a variety of stocks to minimize risk - the types of investments that are easy to get your money out - the riskiest types of investments answer: - a variety of stocks to minimize risk

PF- Sec. 2: A stock broker _____.

- analyzes stock and advises to buy, hold, or sell - buys and sells stock - manages a mutual fund - works on the trading floor at the NYSE answer: - buys and sells stock

PF- Q 2: A stock table is used to _____.

- give you basic information and price history for stocks - summarize your analyst's suggestions - sell stock - communicate with a stock broker answer:

PF- Sec. 1: The rate of return is the _____.

- interest you earn from stock - the money that is returned to you when you sell an investment - percentage that shows how much gain or loss an investment makes - a number that lets you know how risky an investment is answer: - percentage that shows how much gain or loss an investment makes

PF- Q 2: The ease with which you can get your money out of an investment is known as its _____.

- liquidity - risk - rate or return - opportunity cost answer:

PF- Sec. 3: The difference between a chosen investment and one that is passed up is _____.

- liquidity - risk - rate or return - opportunity cost answer: - opportunity cost

PF- Q 2: Choose all that apply. Select all the common investment alternatives.

- mutual fund - retirement investment - money market account - real estate - stock - IDA answer:

PF- Sec. 3: Lilly would like to gather more information about investing in stock. What resources can she use to find out more information?

- online portfolios, stock analysts, and books - principles, strategies, and risks - full-service stock broker, books, financial articles, and financial advisers - fund manager, friends, and parents answer: - full-service stock broker, books, financial articles, and financial advisers

PF- Sec. 3: Choose all that apply. Select each of the factors you should consider when investing.

- opportunity cost - risk - rate of return - liquidity answer: - risk - rate of return - liquidity

PF- Sec. 1: Using money to try to make more money is called _____.

- saving - investing - trading - diversifying answer: - investing

PF- Q 2: Buying or selling stock is _____.

- saving - investing - trading - diversifying answer: - investing (guess)

PF- Q 2: A collection of money from a group of investors used to buy different investments is called a _____.

- stock - mutual fund - money market - high-yield savings account answer: - mutual fund

PF- Q 2: Choose all that apply. Select all the advantages of a retirement account.

- tax free until you withdraw money when you retire - highest interest rates - deposits may be matched by the company for which you work - money is taken out of your paycheck before you pay taxes on it - high penalties for making withdrawals answer: - tax free until you withdraw money when you retire - deposits may be matched by the company for which you work

PF- Q 2: The stock market is _____.

- the section of the newspaper where you learn how much a stock is worth - a place where you buy and sell stock - an organized way for people to buy and sell stocks - the same as a brokerage firm answer:

PF- Sec. 2: The stock market is _____.

- the section of the newspaper where you look up how much a stock is worth - a place where you buy and sell stock - an organized way for people to buy and sell stocks - the same as a brokerage firm answer: - an organized way for people to buy and sell stocks

PF- Q 2: Ray invested in two different savings bonds. Did he diversify?

- yes - no answer:

PF- Sec. 3: Name at least four saving and investing principles or strategies.

Writer: I. Deposit $50 per month into a basic savings account. II. Take $1,000 out of savings account and put it into a CD. III. In two years, start contributing on a regular basis to a mutual fund. IV. In five years, start contributing on a regular basis to a retirement plan

rate of return

a percentage that shows how much gain or loss an investment makes

shareholder

a person who owns shares of a company's stock

retirement account

a plan for setting aside money to be spent after retirement

IRA

a retirement account that lets you save and invest money tax-free until you withdraw it when you retire

401(k)

a retirement plan that some private corporations offer their employees

share

a single unit or equal part

share

a single unit or equal part of stock

stock symbol

a unique set of letters assigned to a company for the stock market

stock market

an organized way for people to buy and sell stocks and for corporations to raise money. The New York Stock Exchange and NASDAQ are the biggest in the United States

diversification

investing in a variety of investments in order to limit losses in the event of a sharp decline in a particular type of investment

P/E

price to earnings ratio; the latest closing price divided by the earnings per share

PF- Sec. 2: What is the most important information you need to receive a stock quote? Once you have information, in two to three sentences, describe what information you can obtain from a stock quote.

Writer: When you want to see how your stock is doing, you look at a stock quote. You'll need the company's 'stock symbol' to look up the quote. A stock quote is the current value or price of a stock.

PF- Q 2: Lilly would like to start investing. From what tools and services can she benefit?

Writer:

PF- Q 2: Miranda thinks she is ready to invest in the stock market. What should she do to prepare?

Writer:

PF- Sec. 1: List at least four investment alternatives.

Writer: - Stocks - Mutual funds - Retirement Investments - Real Estate

stock

a certificate representing a share of ownership in a company

mutual funds

a collection of money from a group of investors that is used to buy different investments, like stocks, bonds, and real estate, managed by professionals

stock broker

a professional who buys and sells stocks and other investments for customers

403(b)

a retirement plan available to employees of nonprofit organizations, such as schools and hospitals

opportunity costs

the difference between a chosen investment and one that is passed up

liquidity

the ease with which an investment can be turned into cash without losing its value

stock quote

the prices of a stock at a particular point during the day

fund manager

the professional who decides where to invest money in a mutual fund

trade

to buy or sell stock

investing

using money in order to try to make more money