Personal Finance and Banking Final Review

What is a Bull Market?

• A market in which stock prices are rising and investors feel optimistic.

• A market in which stock prices are falling and investors feel pessimistic.

• A market where only bonds are traded.

• A market that is closed to new investors.

What does Diversification mean in investing?

• Keeping all investments in cash.

• Investing only in government bonds.

• Spreading investments across different assets to reduce risk.

• Investing all money in one asset to maximize returns.

Which of the following is a characteristic of a Bear Market?

• Stock prices are rising.

• Investors feel optimistic.

• Stock prices are falling.

• The market is stable.

What is a Common Stock?

• A type of bond issued by corporations.

• Equity ownership in a corporation that may pay dividends.

• A government-issued security.

• A type of insurance policy.

What is a Bond?

• An insurance policy for health coverage.

• A type of stock that pays dividends.

• A debt investment issued by a company or government.

• A retirement savings plan.

What is a Dividend?

• A fee paid to brokers for trading stocks.

• A share of profits paid to stockholders.

• A type of bond interest.

• A tax on stock transactions.

What is a Pump and Dump Scam?

• Fraud where false info inflates a stock price so insiders can sell at a profit.

• A legitimate way to increase stock value.

• A type of retirement plan.

• A method of diversifying investments.

What is a 401(k) plan?

• A type of health insurance.

• An employer-sponsored retirement savings plan for private-sector employees.

• A stock market index.

• A government bond investment.

What is a 403(b) plan?

• A government-issued bond.

• A stock market strategy.

• A type of life insurance.

• A retirement savings plan available to nonprofit employees.

What is a Defined Benefit Plan?

• A government bond.

• A retirement plan that specifies benefits based on salary and years of service.

• A stock investment strategy.

• A type of health insurance plan.