Personal Finance SG 2

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Personal Finance SG 2
2012-09-17 20:24:55

Personal Finance & Economics Study Guide for Unit 2
Show Answers:

  1. What is an action that can produce financial gain or loss?
    • Risk
  2. What is combining investments with different risk levels and market charecteristics?

    Web Def: act of introducing variety (especially in investments); "my broker recommended..."
    • Diversification
  3. What is the ease with which an asset can be turned into cash?

    Web Def: The availability of liquid assets to a market or company.
  4. What is the IRA
    • Individual Retirement Accoun
    • t
  5. A professionally managed investment program funded by shareholders that trades in diversified holdings.
  6. Retirement Savings Fund offered by employers; self managed
    • 401K
  7. What is a savings plan operated by a State or College to help set aside funds to defray future college costs?
    • A 529 Plan
  8. What is ownership in a corporation purchased in shares?
  9. What is NASDAQ; NYSE & AMEX?
    Stock Exchanges
  10. What is Dow Jones Industrial Average?
    30 large companies measuring NYSE performance
  11. What is Standard & Poor's 500 (S&P 500)?
    500 widely held companies whose stock performance serves as a broad measurmenet of changes in stock prices

    ie. they rise/fall everyone else will too
  12. What is NASDAQ Composite Index ($COMPQ)?
    Concentration of (technology) companies; measures NASDAQ  exchange performance

    Web Def: An index that covers the price movements of all stocks traded on the NASDAQ Stock Market.
  13. What is stock price/earnings per share?

    Web Def: What is the ratio of a public company's price per share & its net income after taxes on a per share basis.
    • P/E Ratio
    • (Price Earnings Ratio)
  14. What is money loaned to a business or government - has maturity date; paid back w/ interest?
    • Bonds
  15. What is  issued  by U.S. Government; low risk; maturity?
    Treasury Securities
  16. Who sells all investment products (stocks, bonds & funds)?

    Web Def: an individual that arranges transactions between a buyer & a seller, & gets a commission when the deal is executed.
  17. What are 2 online brokers?