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Unit 2 Test Review Name: __________________________________________
1. What is our KISS (Keep It Simple, Students) definition of Savings?
2. When we have a savings account at the bank, what is it best used for?
3. What is our KISS definition of investing?
4. How does both savings and investing store money for future use?
5. In finance, what is meant by the term “liquidity”?
6. What are needs? Please list 2 examples
7. What are wants? Please list 2 examples
8. Please define “discretionary income”?
9. What is our KISS definition of assets?
10. What is our KISS definition of liabilities?
11. What equation defines “net worth”?
12. Assets – Liabilities = Net Worth
13. What is a budget and how does it help us?
14. What does it mean to “Pay yourself first” when creating a budget plan?
15. Consumer Decision Process:
A.
B.
C.
D.
E.
F.
16. What is the advantage of using shopping lists?
17. What is impulse buying and why can it become a problem?’
18. What is comparison shopping?
19. What is an opportunity cost?
20. What is a trade off?
21. What is puffery?
22. Is this statement supposed to be taken literally (why or why not): I’m lovin’ it
23. Is this statement supposed to be taken literally (why or why not): 50% chicken than our original Chicken Noodle Soup
24. Is this statement supposed to be taken literally (why or why not): Eyes have never looked so magnetic
25. Is this statement supposed to be taken literally (why or why not): Only the best shoppers use our products
26. Inflation means general price increases that tend to increase the cost of living (TRUE or FALSE)
27. Risk capital is money we can afford to lose (TRUE or FALSE)
28. What is needed to prove fraud?
29. Some life insurance policies are designed to accumulate savings, but can they be sold in Wisconsin as “investments”?
30. What is the pyramid investment strategy we talked about in class (you can illustrate with a simple drawing)
31. A pyramid scheme is a type of fraud, please describe how it works
32. Collectibles (gold, silver, gems, baseball cards, stamps) are risky investments that are at the top of our investment pyramid, because few should be putting money there.
TRUE or FALSE
33. In general, safe places to store and/or invest money pay low returns.
TRUE or FALSE
34. In general, when we hope to earn above average returns on our money, we are taking a chance with higher risks too. TRUE or FALSE
35. When companies sell bonds, they are creating debt to the bondholders
TRUE or FALSE
36. When companies sell stock, they are creating equity or ownership in a company.
TRUE or FALSE
37. What is common stock?
38. What are dividends?
39. What is preferred stock?
40. What is appreciation?
41. What is depreciation?
42. What are the 2 ways to make money in the stock market?
43. For most stock owners, the greatest returns are from appreciation and not dividends
TRUE or FALSE
44. Growth stocks have stable histories of paying dividends and appreciation, so people expect the value of these stocks to “grow”
TRUE or FALSE
45. Income stocks pay above-average dividends, so stock owners often keep these stocks because they pay a steady income.
TRUE or FALSE
46. Blue Chip stocks are nationally recognized companies that people count on to hold and increase their values.
TRUE or FALSE
47. What is the Dow Jones Industrial Average?
48. What is a “bull market?
49. What is a “bear market”
50. What are stock brokers?
51. What is the oldest and largest U.S. stock exchange?
52. What is The American Stock Exchange?
53. What is NASDAQ (National Association of Security Dealers & Automated Quotations)?
54. Stocks are sold on markets of buyers and sellers.
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