Ries chapter 10-12 test

How quickly your money can be converted into cash.

• Illiquid
• Liquidity
• Equity
• Collateral

_______________ is about planning for future wants and needs where __________________ is about building wealth.

• investing/saving
• emergency funds/contingencies
• savings/investing
• contingencies/emergency funds

What is the purpose of an emergency fund?

• To spend on wants

• To use for retirement at age 65
• To pay for unexpected expenses or contingencies
• To use for vacations or a second home

Ideally, an emergency fund should be ____________ months of expenses.

• 1-2
• 2-4
• 3-6
• Any amount you can save is ideal

How do you know when you are building wealth?

• You can take care of emergencies
• You can reach your short term and intermediate goals
• You own at least 100 shares of a corporation
• Your assets are growing faster than the rate of inflation

Which of the following assets would be the least liquid?

• cash

• Home

• a 1 year CD

• Car

The value of all of your acquired assets after long term investing.

• real estate

• estate

• payola

• living will

The plan for distribution of your assets upon death is called a/an_________________

• real estate sell off

• estate plan

• death wish

• trustee

A fund to provide scholarships at a high school and funds for missionary trips at church is an example of a/an _____________________

• foundation
• security
• contingency
• intermediately

When investing, what is the general correlation between risk and return?

• There is no correlation
• The higher the risk the lower the return
• The higher the risk the higher the return
• The lower the risk the higher the return.