Investing and Saving

The New York Stock Exchange is where trading is done through a network of investment companies

• True

• False

A ________________ bond is one that can be converted into a predetermined amount of the company.

• Convertible
• Corporate
• Adjustable
• Exchangeable

___________ accounts work like a checking account, but with limited withdrawals.   Pays a higher rate of interest than savings accounts and the interest rate can vary while the money is deposited.

• Money Market 
• Savings 
• Treasury 
• Penny

The time value of money can best be explained using which of the following concepts?

• The risk-to-return relationship
• The "pay yourself first" philosophy
• Make your money work for your
• Time, money, and rate of interest relationship

Bonds or bills issued by the U.S. Government

• Municipal Bonds
• Convertible Bonds
• Treasury Issues
• Corporate Bonds

What approximate interest rate would an investor need to earn in order to double the value of an investment in six (6) years?

• 12%
• 72%
• 6%
• 10%

Monica adds $500.00 to her mutual fund every year for the next 10 years.  Mason decides to wait 10 years when he knows he will have a lump some of $5,000.00 to invest in a mutual fund.  If both Monica and Mason earn on average a 7 percent rate of return, who will have the larger mutual fund balance in 20 years?

• There is not enough information presented to make a prediction
• They will have the same balance amount because they each invested the same amount at the same rate.
• Monica
• Mason

Owning __________ means you own a part of a publicly traded company.

• Bonds
• Mutual Funds
• Stock
• Treasury Issue

Blue Chip Stocks are issued by older, larger, well established companies that have a proven record of paying dividends.

• True
• False

Diversity is a technique that reduces risk by allocating investments among various financial instruments, industries and other categories.

• True
• False