Lesson ABR:B5-2
Financial Investments
 
CD ABR.  Agribusiness
Unit B.  Starting and Operating an Agribusiness
Problem Area 5.  Managing Personal Finances
Lesson 2.  Financial Investments
 
 

1. A (n) ________________ allows an individual to accumulate tax-deferred savings and then receive periodic payouts for a set period of time.

a. annuity

b. money market account

c. municipal bond

d. ownership of assets

Answer: a

2. What is an investment that sees individual investors pool their money and professional money managers manage the pool?

a. bonds

b. certificate of deposit

c. mutual funds

d. stocks

Answer: c

3. What represent a share of ownership in a company, and may increase or decrease in value based on the companyís performance?

a. bonds

b. certificate of deposit

c. stocks

d. treasury bills

Answer: c

4. Which type of investment would be considered to have a relatively constant liquidity?

a. cash

b. certificates of deposit

c. treasury bills

d. treasury bonds

Answer: a

5. Which is a true statement regarding simplified employment pensions?

a. Contributions are deducted directly from the individualís paycheck before taxes.

b. There are three forms of simplified employment pensions: money-purchase, profit-sharing, and combination of the two.

c. These allow employees to make contributions into individual retirement accounts (IRAs).

d. These are similar to 401 (k) plans; however, the participants are commonly public employees.

Answer: c

1. What is buckling?

a. a force that acts to compress or shorten the thing it is acting on

b. a force that acts to expand or lengthen the thing it is acting on

c. what happens when the force of tension overcomes an objectís ability to handle tension

d. what happens when the force of compression overcomes an objectís ability to handle compression

Answer: d
Why are there so many types of investments?
a)So that people from all over the world can invest
b)So that people from all states can invest
c)So that people of all ages and backgrounds can invest
d)So that people of all employment can invest


Answer: c
Why are money market accounts a less liquid investment than a savings account?
a)Unlike a savings account, MMA often have restrictions on the number of withdrawals per month.
b)The money has to be help in an MMA for ten years before it can be touched.
c)The money in an MMA is not making interest as quickly as a normal savings account.
d)The money in an MMA has to be invested before it can be taken out.


Answer: a
Why are savings bonds a very secure investment?
a)They are backed by the bank and always make interest.
b)They are insured by private companies.
c)They do not collect interest.
d)They are insured by the government and are replaced if lost.


Answer: d
Distinguish between treasury notes and treasury bills.
a)T-notes are from the federal government and T-bills are from the Federal Reserve.
b)T-notes are an intermediate investment and T-bills are a short-term investment.
c)T-notes are a short-term investment and T-bills are a long-term investment.
d)T-notes are in intermediate investment and T-bills are a long-term investment.


Answer: b
What is the difference between treasury bonds and municipal bonds?
a)A treasury bond is issued by the Federal Reserve and a municipal bond is issued by the Executive Office.
b)A treasury bond has high taxes from local governments and a municipal bond has not taxes.
c)A treasury bond is issued by the federal government and a municipal bond is issued by the municipal government.
d)A treasury bond is issued by the federal government and a municipal bond is not subject to federal taxes.


Answer: d
Why is real estate a popular investment?
a)It offers the lowest interest rates.
b)It makes the quickest profit.
c)It is a tangible investment.
d)It is easily maintained.


Answer: c
What is the advantage of investing in precious metals?
a)They tend to retain value, even in the case of economic crisis.
b)They are very easy to acquire.
c)They can be passed down through a family.
d)They gain value in economic crisis and are sold easier in those times.


Answer: a
The ease of converting an asset into cash without affecting the price is known as _____.
a)asset conversion
b)liquidity
c)viscosity
d)liquefaction


Answer: b
Distinguish between 401 (k) and 403 (k) plans.
a)A 401 (k) makes more money.
b)A 401 (k) is a retirement plan for the public sector and a 403 (k) is for the private sector.
c)A 401 (k) is a retirement plan for employees of the private sector and 403 (k)s are for employees of the public sector.
d)A 403 (k) makes more money.


Answer: c
Which of the following is for self-employed individuals?
a)Self-employed Retirement Plan
b)IRA
c)Defined benefit plan
d)Keogh Plan


Answer: d