UNHS - Personal Finance - Self check 10

A short-term investment is one held for

• at least one year.

• a year or less.

• two years.

• three years.

Risk is

• a measure of the likelihood that something will be lost.

• the amount of an investment covered by the FDIC.

• the amount of an investment on which you must pay taxes.

• a measure of how investment changes your budget.

A stock is

• a group of people who pool their resources.

• a promise to repay a debt along with interest.

• a share of ownership in a corporation.

• a valuable good such as gems or gold.

What is typical of preferred stock?

• pay no dividends

• owners vote on company issues

• value changes frequently

• fixed, regular dividends

What is typical of common stock?

• The owners receive fixed, regular dividends.

• The owners are paid dividends before creditors.

• The stock’s value can increase rapidly.

• The stock’s value is stable but grows slowly.

Suppose someone who has purchased stock sells it to another investor. This transaction takes place in the

• secondary market.

• primary market.

• initial public offering.

• federal government.

A corporate bond is one that

• a local government issues to raise money.

• a corporation issues to raise money.

• a state government issues to raise money.

• the federal government issues to raise money.

The face value of a bond is

• how much interest it will pay to the bond holder.

• how much it sells for in the secondary market.

• the principal (amount for which the bond was issued).

• how much gold the government keeps to back the bond.

A closed-end mutual fund

• offers an unlimited number of shares.

• offers a limited numbers of shares.

• is owned by a single individual.

• can only invest in gold or silver.

A time in which stock prices fall is a______ market.

• bear

• bull