Chapter 8 Pretest

Long-term investments, properly diversified, include the following mutual funds:

Which of the following is a good investment option?

Which statement is true about liquidity?

A reason that people need to save and invest is to:

Company Xʹs board of directors has decided to issue a portion of its earnings to its shareholders. If you own stock in Company X, you can expect to receive a(n):

Savings accounts and money-market accounts are most appropriate for:

The benefit of diversification in your investments is:

To ensure that some of your retirement savings will not be subject to income tax upon withdrawal, you would contribute to:

A young investor willing to take moderate risk for above-average growth would be most interested in:

In some cases, employers will match the employee contribution, but you should fund your plan whether your company matches or not. This statement refers to:

A retirement plan found in nonprofit organizations such as churches, hospitals and schools.

Which of the following statements about the stock market is false?

When buying and selling investments, you should not:

A savings account sold by an insurance company, designed to provide payments to the holder at specified intervals, usually after retirement.

Money markets are great for your emergency fund due to their liquidity and stability.

The purpose of war bonds is to finance military operations during war time. The last time the United States issued war bonds was during the Vietnam War.

A mutual fund portfolio that is properly diversified will have all investment dollars located in just one of four different classes of financial assets.

Single stocks and mutual funds carry the same amount of risk.

You can start investing with a small amount of money.

Good investment portfolios are extremely complex.

You should start investing as soon as you have your college education funded.

If you leave a job and have money saved in your employerʹs retirement plan, always roll that money into an IRA using a direct rollover, which allows you to avoid taxes and penalties.

If you get into financial trouble, borrowing against your retirement plan is a good option.

Saving and investing have nothing to do with the amount of money you make.