Personal Finance

Chapter 19

19-1 Key Terms:

Saving –

Investing –

Yield –

Liquidity -

19-1 Checkpoints:

How does saving influence economic activity?

What are the nine main categories of saving and investment alternatives?

What are four factors to consider when selecting an investment?

19-1 Assessment:

1. Which of the following is investing for current income?

a. retired person who needs to pay living expenses

b. business manager planning for retirement

c. student putting away money for college

d. family that wants to buy a vacation home

2. The most liquid investment listed here is…

a. rare coins

b. real estate

c. a savings account

d. a house

3. A person who desires high income from an investment would be most concerned with

a. safety b. return c. liquidity d. risk

19-2 Key Terms:

Preferred Stock –

Common Stock –

Stockbroker –

Stock Exchange –

Market Value –

19-2 Checkpoints:

How does preferred stock differ from common stock?

What is the purpose of a stock exchange?

How do various economic factors affect stock prices?

19-2 Assessment:

1. Which of these statements best describes preferred stock?

a. vote at the annual meeting of the company

b. first priority for receiving dividends

c. low priority for receiving dividends

d. no stated dividend rate

2. Higher spending for recreation in the economy would most benefit the stock prices for companies in the _?_ industry..

a. electronics b. health care c. office equipment d. automobile

19-3 Key Terms:

Municipal Bond –

Corporate Bond –

Mutual Fund -

19-3 Checkpoint:

List the types of bonds issued by the federal government of the United States…

What affects the value of a bond?

What are the main types of mutual funds?

19-3 Assessment:

1. Municipal bonds are issued by…

a. corporations

b. the federal government

c. international companies

d. state and local governments

2. The price of a mutual fund share is most affected by…

a. current tax rates

b. the value of investments

c. current foreign rates

d. the value of housing

3. True or False… A bondholder is part owner of a company.

4. True or False… Interest rates in an economy affect the value of a bond.

19-4 Key Terms:

Real estate –

Mortgage –

Equity –

Assessed value –

19-4 CheckPoint:

What are four available housing alternatives?

What are the main benefits of home ownership?

What are common costs of home ownership?

19-4 Assessment:

1. The person who reports on the value of a home is a(n)

a. lawyer

b. real estate agent

c. appraiser

d. mortgage broker

2. A common financial benefit of home ownership is

a. low property insurance costs

b. tax deduction for your down payment

c. increased property value

d. low maintenance costs

19-5 Key Terms:

Commodities –

Futures contract –

Collectibles –

19-5 Checkpoint:

What types of commodities are commonly used with futures contracts?

What are common types of collectibles?

19-5 Assessement:

The spot price for gold or silver refers to the

a. interest for borrowing to buy the precious metal.

b. current market price of the precious metal.

c. future market price of the precious metal.

d. global price for the precious metal set by the World Bank