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CHAPTER 16

REVIEW QUESTIONS

1.     ______________ and IRA’s are both a type of Time Deposit. CD

2.     ________________ makes you an owner of a corporation. STOCK

3.     _________________ is the TIME when you are supposed to cash in on your investment. MATURITY

4.     A ______________ is when you have loaned money to a company. BOND

5.     A certificate of deposit is an example of a __________________? TIME DEPOSIT

6.     A disadvantage of a certificate of deposit with a longer maturity is ______________? REDUCED LIQUIDITY

7.     Choosing a variety of investments is referred to as ________________? DIVERSIFICATION

8.     If you are enrolled in this, you get more stock instead of quarterly checks form the corporation. DRIP

9.     The difference between the higher selling price of a stock and the lower original purchase price is the investor’s ______________. CAPITAL GAIN

10.  What insures bank accounts? FDIC

11.  What is a SMALL stock exchange for smaller companies? NASDAQ

12.  What is the largest stock exchange in the U. S. NYSE

13.  What monitors the market by averaging 30 different stocks? DJIA

14.  What monitors the market by averaging 500 different stocks? S and P

15.  What reaches maturity when you are 59 and ½ years old? IRA

16.  What refers to how easy it is to turn your investments into cash? LIQUIDITY

17.  Which organization investigates illegal stock trades? SEC

18.  Who led the country during most of the depression? FDR Franklin D. Roosevelt

19.  Who was the president when Black Tuesday happened? Herbert Hoover

KNOW THESE FACTS

1.     A bear market is one that is going down.

2.     A bull market is one that is on the rise.

3.     A regular savings account would be considered a low yield account (low interest)

4.     A U.S. savings bond would be considered a low-risk investment.

5.     An investor who sells his stock at a price that is lower than the price he paid for it incurs a capital loss.

6.     An IRA is an example of a low liquidity investment (low risk).

7.     CDs would have an advantage of low liquidity.

8.     DJIA stands for Dow Jones Industrial Average.

9.     DRIP stands for Dividend Reinvestment Program.

10.  Hoover was president when “Black Tuesday” happened.

11.  IRAs and CDs are both examples of time deposits.

12.  NASDAQ is a stock exchange for corporations that are not large enough for the NYSE (Small Corporations).

13.  The Dow Jones Industrial Average is made up of 30 “Blue Chip” stocks.

14.  The roaring 20s preceded (happened before) the Depression.

15.  The stock market crash that signaled the beginning of the depression happened on October 29, 1929.

16.  Yield refers to the interest you get on your investments.

CLASS MADE

Chapter 16 REVIEW QUESTIONS

1.     How old do you have to be to get your IRA? 59 and ½

2.     What does IRA stand for? Individual Retirement Account

3.     What does CD stand for? Certificate of Deposit

4.     What does DRIP stand for? Dividend Reinvestment Program

5.     What kind of stock can vote? Common Stock

6.     What does NYSE stand for? New York Stock Exchange

7.     What is capital gain? When you make a profit from selling stock

8.     What is black Tuesday? When the stock market crashed, October 29, 1929

9.     What are the two types of stocks? Common and Preferred

10.  How many stocks are on the Dow Jones Industrial Average (DJIA)? 30

11.  What is a bond: When you loan money to a corporation

12.  You get your money back when the bond reaches it is ________________? MATURITY

13.  Where was the stock market started? New York

14.  A person who is licensed to sell stock? A broker

15.  What does IPO stand for? Initial Public Offering

16.  Which accound pays better interest a savings account or Money Market? A money Market Account

17.  What is the second largest stock? AMEX American Exchange

18.  What are mutual funds? When you invest money in a variety of stocks

19.  What is a capital loss? If you lose money from selling stock and you can deduct it from your taxes

20.  What does it mean to speculation? Buying stock to sell it quickly for profit

21.  What is a 401K? A retirement account through your job, a pension plan

22.  What is a municipal bond? A bond from a local government

23.  What does the FDIC insure? Insures the money in your bank account up to 250,000

24.  What is diversification? You are invested in a variety of types

25.  What does the SEC (Securities and Exchange Commission) do? They investigate the stock market

26.  S and P Standard and Poors has how many stocks? 500 stocks

27.  NASDAQ is stock market for small companies

28.FDIC

29.  FDR Franklin Deleanor Roosevelt, president during most of the depression, His plan was the New Deal

30.  Liquidity: How quickly you can turn your investment into cash

31.  Herbert Hoover, President when the stock market crashed

32.  Stocks give you ownership

33.  Bonds you own the company money

34.  The difference between the higher selling price of a stock and lower original price of the stock is called the investors ________________? Capital Gain (you sold it for more money than you bought it)

35.  Roaring twenties came before (preceded) the great depression

36.  Time Deposits: CD’s and IRA’s

37.  Is an IRA a high liquid or low liquid account? LOW LIQUID

38.  Black Tuesday OCTOBER 29, 1929 Day when the stock market crashed

39.  Bull Market: It is going up

40.  Bear Market: It is going down

41.  Yield: Your regular savings account: LOW YIELD Not getting much

42.  US Savings Bond: Low Risk (Less likely to loss money)

43.  Which is bigger the NASDAQ or NYSE? NYSE