Financial Planning I Unit 2

The purpose of the risk pyramid is to show a comparison of:

• one stock to another.
• one investment to another.
• stocks to stock mutual funds.
• corporate bonds to municipal bonds.

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A marketplace where trading of securities such as equities, bonds, currencies, and derivatives occurs is referred to as a:

• call market.
• bear market.
• financial market.
• foreign exchange market.

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Investors take a risk for the potential of receiving a:

• bonus.
• prize.
• promotion.
• return.

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Ownership investments are ideal for investors who are:

• risk-averse.
• risk-tolerant.
• close to retirement.
• just beginning to invest.

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Brian recently got his first part-time job as a food bagger at a local grocery store. He needs a safe place to store his income that allows him to withdraw money easily and frequently. Brian should consider opening which type of account?

• savings
• checking
• health savings
• individual retirement

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Which is an advantage of a money market account over a savings account?

• The rate of return on a money market account is significantly better.
• Money market accounts provide corporate ownership rights.
• One can often write checks from a money market account.
• Money market accounts are insured by the FDIC.

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In investing, legal lending or owning agreements between individuals, businesses, or governments are known as:

• bonds.
• guarantees.
• securities.
• treaties.

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Which is an example of a lending investment?

• bonds
• stocks
• antiques
• real estate

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Which statement is true about certificates of deposit?

• They may depreciate in value.
• The riskiest investment is a certificate of deposit.
• One must pay a penalty for withdrawing money early.
• Certificates of deposit are issued by corporations or governments.

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Marcus wants to invest a portion of his money in long-term securities to finance his son's college education and his own retirement. To help him make the best investment decisions, Marcus should obtain the services of a:

• loan officer.
• licensed tax accountant.
• certified financial planner.
• credit-union representative.

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