Stock Market Review

The highest Morningstar rating is

**********

If an investor can earn 9 percent on an investment, approximately how long will it take to double in value?

72 months

8 years

9 years

12 years

Which statement is true about mutual funds?

You can choose which securities to include in your mutual funds

Mutual funds offer guaranteed returns

Mutual funds are convenient and professionally managed

All mutual funds buy stocks

Generally, a portfolio that has 80% of its assets in stocks would be best suited for:

A 18-yr-old using the assets to pay for college expenses over the next 4 years.

A 35-yr-old investing for retirement

A 75-yr-old investing for income and capital preservation

None of the above

A zero-coupon bond pays interest

Periodically

At the maturity date

At the time of purchase

Never

A mutual fund ticker symbol ends with the letter

C

G

X

Z

A stock considered a large cap has market capitalization

Less than $2 Billion

Between $2 Billion and $10 Billion

Between $10 Billion and $100 Billion

Greater than $100 Billion

Your Subtopics Go Here

Dow Jones Industrial Average

S&P 500

Russell 2000

Wilshire 5000

Index that measures smallest businesses listed

By definition, what type of bond is purchased at face value?

Corporate bond

Treasury bond

Non-coupon bond

Coupon bond

Your Subtopics Go Here

Dow Jones Industrial Average

S&P 500

Russell 2000

Wilshire 5000

The ‘total stock market’ index is

What investment term is shown here?

This retirement investment is diversified

401(k)

Roth IRA

Both

Neither

Your Subtopics Go Here

Volume

Sector

Market capitalization

P/E ratio

The number of shares outstanding multiplied by its ‘last’ traded price equals a stock’s

Your Subtopics Go Here

Mutual Fund

ETF

Bond

Stock

An IOU certifying that you loaned money to a level of government or a corporation is a

Of the following which ticker symbols, which one is a mutual fund?

AAPL

SBUX

FCLFX

DJI

Your Subtopics Go Here

Dow Jones Industrial Average

S&P 500

Russell 2000

Wilshire 5000

Index that measures 30 blue-chip stocks

This retirement investment allows earnings to be withdrawn without penalty

401(k)

Roth IRA

Both

Neither

Your Subtopics Go Here

Lower the risk, the higher the return rate

Higher the risk, the lower the return rate

Higher the risk, the higher the return rate

The two are not related

The basic rule of a risk-to-return relationship is that the

Your Subtopics Go Here

The “pay yourself first” philosophy

The risk-to-return relationship

Compound interest

The Rule of 72

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

Moody’s rates

Stocks

Bonds

Mutual funds

US Savings bonds

Which one of the following investments has the highest risk and the highest potential rate of return?

Money market mutual fund

Stocks

Government bonds

Savings bonds

What a company pays you per share for owning stock is called

Dividend

Industry

Sector

Risk

A bond’s interest rate is called its

Principal

Coupon rate

Face value

Par value

Which type of stock is the most likely to pay a dividend?

Income stock

Small cap stock

Common stock

Growth stock

A savings account is more liquid than (a)

Mutual fund

Retirement plan

House

All of the above

A stock considered a mid cap has market capitalization

Less than $2 Billion

Between $2 Billion and $10 Billion

Between $10 Billion and $100 Billion

Greater than $100 Billion

Rank in order of highest potential reward (1) to

lowest potential reward (8)

Potential for Earnings on investment

Investment Option

Preferred Stock

CDs

U.S. Savings Bonds

Commodities

Growth Stock

Insured Savings Account

Money Market Account

Balance Mutual Funds

FinancialPlanningPyramid

PennyStock

Commo- dities

CollectiblesSpeculative Stock / Bonds /Mutual Funds

RealEstate

Blue-ChipCommonStock

GrowthMutual Funds

High-GradeConvertibleBonds

High-GradePreferredStock

BalancedMutual Funds

High-GradeCorporate Bondsor Mutual Funds

High-GradeMunicipal Bondsor Mutual Funds

Money MarketAccountsor Mutual Funds

Certificatesof Deposit

U.S. SavingsBonds

Insured Savings / Checking Accounts

TreasuryIssues

Highest RiskHighest Earnings

Lower RiskLower Earnings

3-J

NEFE High School Financial Planning ProgramUnit Three – Investing: Making Money Work for You

29

Yes

No

Dollar-cost averaging is an incremental way to invest?

Yes

No

Investors with a pessimistic attitude are nicknamed “bulls”.

Yes

No

The NYSE lists mainly technology stocks.

Stock Market Simulation

How much money do you start with?

$10,000

$20,000

$100,000

$200,000

SMS How much is the commission you have to pay for each transaction?

$10

10%

15%

$25

Yes

No

SMS

Can you buy on margin?

How many transactions are you allowed throughout the simulation?

What is found in a stock listing?

Volumeinvestment goal

market/exchange

load

52-week high

52-week low

bid

Ask

P/E ratio

Earnings per share

fund managerticker

The highest Moody’s rating is

Aaa

A

Baa

B

SMS

What is the interest rate earned on your cash balance?

1%

3%

5%

8%

What is an advantage of having a load?

Don’t have as much money to invest

Money is in an safe investment

Fund manager keeps money in case of emergency

Fund manager offers advice

Which investments may have a load?

Stocks

Treasury bonds

Mutual funds

Corporate bonds

If you have a mutual fund with a load, which is the best to have?

Front-end load

Back-end load

No load

Motherload

This retirement investment is tax deferred

401(k)

Roth IRA

Both

Neither

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