Business Econ–Dave Ramsey–Investing – Flashcards
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To spread around and lower risk.
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diversification
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Best place to keep your emergency fund.
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money market account
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Lowers your risk with investing.
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diversification
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Keep it Simple Stupid is this principle
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KISS
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A savings account device with a certificate
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CD
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Least liquid of all investments
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real estate
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A savings account within an insurance company
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annuity
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When risk goes up, return goes up
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risk return ratio
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Piece of ownership in company stock
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share
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How easily something converts to cash (availability of your money)
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liquidity
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With MOST investments, as risk goes up, return goes:
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up
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This percent of the ten-year periods in history of the stock market where the market has made money
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100
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This investment form typically includes investments in 90-200 various companies
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mutual fund
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Profits that a company distributes to its shareholders
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dividends
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Never invest using this type of money:
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borrowed
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Oil and gold are examples of this type of investment:
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commodities
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When investing, research at least this many years into the history of the investment and know the track record
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5-10
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Savings are used for _____-term investments
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short
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Stocks from overseas companies are called _______ mutual funds
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international growth
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A debt instrument where company owes you money
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bond
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Investments where investors pool their money
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mutual funds
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What degree of risk is an investment in a single stock?
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high
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Good or bad investment--gold, commodities, and viaticals
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bad
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Investment that povides payment on a life insurance policy before death
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viatical
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Young, growing companies generally are _____________ mutual funds
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aggressive
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High or low risk? Aggressive growth fund
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high
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If you begin losing money in your mutual fund, you should do this:
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leave it alone and stop investing in it
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What cap? Aggressive growth funds
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small-cap
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What cap? Growth funds
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mid-cap
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What cap? Growth and income funds
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large-cap
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Which has the lower rate of return--mutual fund, CD, or bond?
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CD
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Which has the higher rate of return--mutual fund, CD, or bond?
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mutual fund
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Low or high risk? Annuities
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low
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Low or high risk? Commodities
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high
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Generally, the more liquid an investment is, the:
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less return
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save or invest? Prom is coming up in a few month
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save
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save or invest? Plan a retirement fund
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invest
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save or invest? Big anniversary party for your parents next year
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save
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save or invest? You want to buy a car in two years
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save
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save or invest? Start a college fund for your baby
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invest
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save or invest? You want to buy a house in five years
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save
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With standard mutual fund diversification, what percent is invested into each type of fund?
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25
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Before even thinking about investing, you should have already paid off all:
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debt
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Buying the beneficiary position on a life insurance policy of someone who is dying; listed by FTC in top 10 scams
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viaticals
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A debt instrument where the return comes on the interest rate paid on the loan
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bonds
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Portfolio managers who do lots of research manage this pool
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mutual funds
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You should never pay retail (asking) price and this requires a lot of cash
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real estate
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Represents a piece of ownership in a company
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single stock
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As interest rates rise, these prices fall
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bonds
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A six month or one year savings instrument that pays a little more interest than a regular savings account
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Certificate of Deposit
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If oil hits a certain level in 90 days, your money will increase tenfold
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commodities/futures
