ugba 135 midterm
ALL Bankruptcy are handled in federal court (Answer)True
Should you always try to contribute enough to your 401K to get the employer match?
(Answer)Yes
Are community property laws established by the IRS or states? (Answer)States
What is a notary public? (Answer)A public officer constituted by law to witness the
execution of certain classes of documents like mortdollargage documents, wills, trusts,
deeds
What is a prenup agreement? (Answer)A prenuptial agreement is entered into before
marriage. This agreement can set forth what will happen to your and your spouse's
assets and income in the unfortunate event of divorce, separation or death.
By filing for bankruptcy, do you get rid of all of your debts? (Answer)All debts EXCEPT
taxes, alimony, child support, student loans
Who said compound interest is the greatest discovery of mankind? (Answer)Albert
Einstein
Times of inflation, what happens to the interest rate? (up or down) (Answer)Higher
interest rates
What's the definition of compound interest? (Answer)Interest paid on both the principal
and accumulated interest
Does it take a dollar of wages to pay back $1 of debt? (Answer)No, it takes more than a
dollar due to taxes
What is the concept of the time value of money? (Answer)Money is worth different
amounts at different times
What is the biggest reason to start saving ASAP? (Answer)Compounding interest
As people get closer to retirement, how should they adjust their portfolio?
(Answer)Adjust portfolio to be less risky, more bonds less stocks
,What is APR? Is that higher than the annual interest rate? (Answer)Annual Percentage
Rate, higher than the interest rate because APR includes fees
According to the nightingale survey, What % of the people who people who start
working at 25 become financial independence by 65? (Answer)5%
What types of accounts does the FDIC insure up to $250,000 (Answer)CD, checking
accounts, savings accounts, IRA (Individual Retirement Accounts) and certain other
retirement and trust accounts
Everytime you get a paycheck, our goal is to save what percent? (Answer)15% of total
income
What's the first step in saving money? (Answer)Creating a budget or spending plan
What's our definition of being frugal? (Answer)Not cheap but value oriented, working
toward their goals, budgeting, and controlling expenses
What is the rule of 72? (Answer)Estimate how long it takes a sum of money to double,
72/interest rate
If you have different types of debt, which is your first priority? (CC) (Answer)Pay off the
loan with the highest interest
How do we define a millionaire in this class? Financially independent, living the life they
want to lead, and able to take care of themselves without financial help from
government sources (Answer)
What's the purpose of an emergency fund (security fund)? (Answer)Cover 3-6 months
of living expenses in the event of illness, job loss, or other emergency.
What's the biggest reason that an investor in bonds would determine whether it is better
to buy a corporate bond or municipal? (Answer)Municipal bonds are exempt from
federal income taxes, may be free from some state income taxes, compare after tax net
return
Are bonds issued by our govt considered risky? (Answer)No
Interest rates rise.... (Answer)Bonds Prices go down
Bond prices up.... (Answer)interest rates down (inverse relationship)
In some states, some bonds are free from taxes on a federal and state level.
(Answer)TRUE
,How do we define what a bond is? (Answer)Bonds are like loans that obligate the
issuer to pay a specified amount of interest for a specified period of time and then repay
the bond holder the face amount of the bond
What happens when a bond is in default? (Answer)A bond default occurs when the
bond issuer fails to make an interest or principal payment within the specified period.
Defaults typically occur when the bond issuer has run out of cash to pay its
bondholders.
What is the current yield? (Answer)Annual Coupon Payments / Price
What is Coupon Yield? (Answer)fixed % rate of interest based upon the PAR (face
value or principle amount) value of the bond
What is yield to maturity? (Answer)YTM: Expressed as an annual percentage rate, it is
the sum of all cash flows from both coupon payments and repayment of the face value
If bond was purchased for a premium, more than face value, yield to maturity will be
lower than the coupon (Answer)
If the bond was purchased at a discount, less than face value, the yield to maturity will
be higher than the coupon (Answer)
When they are granted, how much are stock options? (Answer)Free or require
purchasing shares at bargain prices
Trends pg. 117-118 (Answer)Emerging market growth
Rising inflation and rising interest rates (Answer)
The world is getting older (Answer)
Raw materials are in more remote and hard to reach areas. (Answer)
More people have higher income (Answer)
Environmental trends (Answer)
Keep more cash on hand if the economy is weak. (Answer)yes
Financial advisors are paid to outperform the index (Answer)no
If you place a market order to sell.... (Answer)you expect to sell at the bid price
If you place a market order to buy... (Answer)you expect to buy at the ask price.
, If you place a limit order to sell..... (Answer)you set the lowest price you're willing to sell
If you place a limit order to buy.... (Answer)you expect to buy at the ask price
How often should you reallocate your portfolio? (Answer)At least once a year, review
the allocation of assets in your portfolio
When buying and selling stocks what is the bid? (Answer)the highest price a buyer is
willing to pay at the very instant in time
When buying and selling stocks What is the ask/offer? (Answer)the lowest price a seller
is willing to sell at that very instant in time
What's the difference between a growth investor, a value investor, and a dividend
investor? (Answer)Growth investor: This is an investor looking for strong companies to
grow their sales and earnings, what usually means sales and earnings could grow 15%
or more from one year to the next
Value Investor: this is an investor looking for stocks which have stumbled and who
shares are at bargain prices (Answer)
Dividend Investor: This is an investor wanting income more than growth. the focus is on
stocks that pay above-average dividends (Answer)
If stock options are not exercised by the expiration date what happens to them?
(Answer)the option has no value and basically expires worthless and ceases to exist.
Are ETFs always diverse? (Answer)no
Are profits from stock options and stock units subject to taxes? (Answer)yes
What is the size or the market cap of a company? (Answer)Market cap is the total value
investors are placing on the company at the moment in time
What are restricted stock units and how are they priced? (Answer)A restricted stock
unit (RSU) is compensation issued by an employer to an employee in the form of
company stock
The restricted stock units are assigned a fair market value when they vest. Upon
vesting, they are considered income, and a portion of the shares is withheld to pay
income taxes. (Answer)
Is reinvesting dividends a way of compounding growth? (Answer)yes
Do we recommend selling short or using stop order? (Answer)No
ALL Bankruptcy are handled in federal court (Answer)True
Should you always try to contribute enough to your 401K to get the employer match?
(Answer)Yes
Are community property laws established by the IRS or states? (Answer)States
What is a notary public? (Answer)A public officer constituted by law to witness the
execution of certain classes of documents like mortdollargage documents, wills, trusts,
deeds
What is a prenup agreement? (Answer)A prenuptial agreement is entered into before
marriage. This agreement can set forth what will happen to your and your spouse's
assets and income in the unfortunate event of divorce, separation or death.
By filing for bankruptcy, do you get rid of all of your debts? (Answer)All debts EXCEPT
taxes, alimony, child support, student loans
Who said compound interest is the greatest discovery of mankind? (Answer)Albert
Einstein
Times of inflation, what happens to the interest rate? (up or down) (Answer)Higher
interest rates
What's the definition of compound interest? (Answer)Interest paid on both the principal
and accumulated interest
Does it take a dollar of wages to pay back $1 of debt? (Answer)No, it takes more than a
dollar due to taxes
What is the concept of the time value of money? (Answer)Money is worth different
amounts at different times
What is the biggest reason to start saving ASAP? (Answer)Compounding interest
As people get closer to retirement, how should they adjust their portfolio?
(Answer)Adjust portfolio to be less risky, more bonds less stocks
,What is APR? Is that higher than the annual interest rate? (Answer)Annual Percentage
Rate, higher than the interest rate because APR includes fees
According to the nightingale survey, What % of the people who people who start
working at 25 become financial independence by 65? (Answer)5%
What types of accounts does the FDIC insure up to $250,000 (Answer)CD, checking
accounts, savings accounts, IRA (Individual Retirement Accounts) and certain other
retirement and trust accounts
Everytime you get a paycheck, our goal is to save what percent? (Answer)15% of total
income
What's the first step in saving money? (Answer)Creating a budget or spending plan
What's our definition of being frugal? (Answer)Not cheap but value oriented, working
toward their goals, budgeting, and controlling expenses
What is the rule of 72? (Answer)Estimate how long it takes a sum of money to double,
72/interest rate
If you have different types of debt, which is your first priority? (CC) (Answer)Pay off the
loan with the highest interest
How do we define a millionaire in this class? Financially independent, living the life they
want to lead, and able to take care of themselves without financial help from
government sources (Answer)
What's the purpose of an emergency fund (security fund)? (Answer)Cover 3-6 months
of living expenses in the event of illness, job loss, or other emergency.
What's the biggest reason that an investor in bonds would determine whether it is better
to buy a corporate bond or municipal? (Answer)Municipal bonds are exempt from
federal income taxes, may be free from some state income taxes, compare after tax net
return
Are bonds issued by our govt considered risky? (Answer)No
Interest rates rise.... (Answer)Bonds Prices go down
Bond prices up.... (Answer)interest rates down (inverse relationship)
In some states, some bonds are free from taxes on a federal and state level.
(Answer)TRUE
,How do we define what a bond is? (Answer)Bonds are like loans that obligate the
issuer to pay a specified amount of interest for a specified period of time and then repay
the bond holder the face amount of the bond
What happens when a bond is in default? (Answer)A bond default occurs when the
bond issuer fails to make an interest or principal payment within the specified period.
Defaults typically occur when the bond issuer has run out of cash to pay its
bondholders.
What is the current yield? (Answer)Annual Coupon Payments / Price
What is Coupon Yield? (Answer)fixed % rate of interest based upon the PAR (face
value or principle amount) value of the bond
What is yield to maturity? (Answer)YTM: Expressed as an annual percentage rate, it is
the sum of all cash flows from both coupon payments and repayment of the face value
If bond was purchased for a premium, more than face value, yield to maturity will be
lower than the coupon (Answer)
If the bond was purchased at a discount, less than face value, the yield to maturity will
be higher than the coupon (Answer)
When they are granted, how much are stock options? (Answer)Free or require
purchasing shares at bargain prices
Trends pg. 117-118 (Answer)Emerging market growth
Rising inflation and rising interest rates (Answer)
The world is getting older (Answer)
Raw materials are in more remote and hard to reach areas. (Answer)
More people have higher income (Answer)
Environmental trends (Answer)
Keep more cash on hand if the economy is weak. (Answer)yes
Financial advisors are paid to outperform the index (Answer)no
If you place a market order to sell.... (Answer)you expect to sell at the bid price
If you place a market order to buy... (Answer)you expect to buy at the ask price.
, If you place a limit order to sell..... (Answer)you set the lowest price you're willing to sell
If you place a limit order to buy.... (Answer)you expect to buy at the ask price
How often should you reallocate your portfolio? (Answer)At least once a year, review
the allocation of assets in your portfolio
When buying and selling stocks what is the bid? (Answer)the highest price a buyer is
willing to pay at the very instant in time
When buying and selling stocks What is the ask/offer? (Answer)the lowest price a seller
is willing to sell at that very instant in time
What's the difference between a growth investor, a value investor, and a dividend
investor? (Answer)Growth investor: This is an investor looking for strong companies to
grow their sales and earnings, what usually means sales and earnings could grow 15%
or more from one year to the next
Value Investor: this is an investor looking for stocks which have stumbled and who
shares are at bargain prices (Answer)
Dividend Investor: This is an investor wanting income more than growth. the focus is on
stocks that pay above-average dividends (Answer)
If stock options are not exercised by the expiration date what happens to them?
(Answer)the option has no value and basically expires worthless and ceases to exist.
Are ETFs always diverse? (Answer)no
Are profits from stock options and stock units subject to taxes? (Answer)yes
What is the size or the market cap of a company? (Answer)Market cap is the total value
investors are placing on the company at the moment in time
What are restricted stock units and how are they priced? (Answer)A restricted stock
unit (RSU) is compensation issued by an employer to an employee in the form of
company stock
The restricted stock units are assigned a fair market value when they vest. Upon
vesting, they are considered income, and a portion of the shares is withheld to pay
income taxes. (Answer)
Is reinvesting dividends a way of compounding growth? (Answer)yes
Do we recommend selling short or using stop order? (Answer)No
