Roth Ira Insured Mutual Funds

							                                   Personal Finance Investing Questions
1.    What are 3 financial goals that are most included in the “American Dream?”
2.    What is another word for a home loan?
3.    What does “pay yourself first” mean?
4.    What does “put off a little consumption today for tomorrow’s well being” mean?
5.    What is the relationship between education levels and incomes in the US?
6.    How much does the average American earn yearly?
7.    What is the average income tax rate in the U.S?
8.    What is the maximum income tax rate in the US?
9.    What is a progressive tax?
10.   What does marginal tax bracket mean?
11.   What is a budget?
12.   What are 10 typical monthly expenses individuals have?
13.   What is Inflation?
14.   What is the average inflation rate in the US over the last 20 years?
15.   What is the real interest rate? How do you calculate it?
16.   Can there be a negative real interest rate? If so, what does that mean?
17.   What is a portfolio?
18.   What is a nest egg?
19.   What is Compound Interest?
20.    Why is compound interest so important for meeting long term financial goals?
21.   How does starting investing for retirement at age 22 instead of 32 help you?
22.    What is diversification?
23.    Why is knowing your tolerance for risk important?
24.    What are the 3 time horizons that financial planners refer to?
25.    How many years are associated with each of the 3 time horizons?
26.    How should one change their portfolio over the 18 years of savings for a college education fund?
27.    Why do banks exist?
28.    What are required reserves and excess reserves?
29.    How do banks make a profit?
30.    Why do banks pay interest to people who put money in their accounts?

31.      What are the advantages/disadvantages of putting your money in your backyard? How much does this
      investment historically return?
32.    What are the advantages/disadvantages of putting your money in checking account? How much does this
      investment historically return?
33.   What is a “bounced check?”
34.    What does FDIC stand for? What is it and how does it work?
35.    What are the advantages/disadvantages of putting your money in a savings account? How much does this
      investment historically return?
36.    What does CD stand for? How do they work? Explain.
37.    What does APY stand for? Why is it important?
38.     What are the advantages/disadvantages of putting your money in CD? How much does this investment
      historically return?
39.    How much will you get paid if you have a 3 month, $1000 CD paying 8% interest?
40.   What is a money market? How does it work?
41.    What are the advantages/disadvantages of putting your money in a money market? How much does this
      investment historically return?
42.    Of the above investments, which is the riskiest?
43.    Of the above investments, which is the least liquid?
44.   Why are credit cards so risky?

45. What are stocks? What is a blue chip stock?
46. Why do companies issue shares of stock?
47.    Why do individuals buy shares of stock?
48.    What are the names of the 3 major stock markets in the US?
49.    What is the Dow Jones Industrials? How many companies does it track? What type of companies does it follow?
50.   What is the S&P 500? What does S&P mean? What kind of companies does it follow?
51.   What is the Russell 2000? What type of companies does it follow?
52.   What is the Wilshire 5000? What type of companies does it follow?
53.   What types of companies in general are listed on the NASDAQ?
54.   What causes share prices to go up and down?
55.   What is the historical yearly return of the stock market-Dow Jones-over the last century?
56.   What is a bull market? What is a bear market?
57.   Discuss the relationship between risk and reward.
58.    What 3 things are capital gains taxes applied to?
59.   Discuss what is the capital gains tax and how it works in regard to stocks sold for a profit in less than 1 year. Also
      on stocks sold after owning longer than 1 year.
60.    What is a dividend? What is the dividend tax rate?
61.    Why do some companies pay dividends and others do not?
62.   How do you calculate a dividend’s yield?
63.   What is Market Capitalization? Why is it important?
64.   How do you calculate the Market Cap?
65.   What is a small cap, mid cap and large cap company?
66.   What is the Price/Earnings ratio (P/E)? What does it measure? Why is it important?
67.    How do you calculate the P/E?
68.    What is the historical average P/E?
69.   What is the PEG? What does it measure?
70.   What is the 52-week high and low? What is the close price of a stock in the newspaper?
71.    What does the word “equity” mean?
72.    What are securities?
73.   What is the difference between a stockbroker and an online brokerage?
74.    Can you buy shares of stock directly from a company?
75.    What is a board of directors? What is a CEO?
76.    Does one who owns share of stock partially own the company?
77.    Since world war II, there have been ten recessions. When the stock market has its downturns, how many years is
      the average for the market to return to the break-even point?
78.   Are stocks insured? How much can you lose in the stock market if a stock goes bankrupt?
79.   What does IPO stand for?
80.   What does “going public” mean?
81.   Revenue – Expenditure = Profits Net income = profits = Earnings. True or false?
82.   What is a secondary offering? Why do companies have them?
83.   What is the difference between common stock and preferred stock?
84.   OTC means “over the counter.” What does this mean?
85.   What is a stock split? Why do companies do stock splits? Is it good or bad for stockholders?
86.   What is selling short? Short Sell, Short Cover, sell first, buy back later at a lower price, keep the difference less
      commissions and interest paid to the broker. Comment!
87.   What is buying on margin?
88.   What are ADRs? DRIPS? Spyders?
89.   What are penny stocks? Are they a good buy to average investors?

90.   What is a bond?
91.   Who issues bonds?
92.   Why do investors buy Bonds?
93.   What is commercial paper?
94.   What does “maturity” mean in reference to bonds?
95.   What is the difference between a budget deficit and the national debt?
96.   Why do governments issue bonds? Why do companies issue bonds?
97. Are Bonds insured? How much can you lose in the bond market if a bond-paying company or government goes
    bankrupt?
98. Does one who owns corporate bonds partially own the company?
99. What is a bond’s Yield?
100.    What is a “muni?”
101.    What is a high yield bond? Why does it pay more? What is a Junk Bond?
102.    Are muni’s taxable? If so, what kind of tax applies? Are corporate and treasury bonds taxable? If so, what
    kind of tax applies?
103.    What is the secondary market?
104.    What is paying a discount or premium for a bond?
105.    Who owns American bonds?
106.    Is there more money in the bond market or the stock market?
107.    When the stock market is rising, what usually happens to bond yields?
108.    If market interest rates are higher than the interest rate of an already issued bond, what happens to the yield of
    the bond in the secondary market?
109.    If market interest rates are lower than the interest rate of an already issued bond, would one have to pay a
    premium or discount to buy the already issued bond?
110.    If market interest rates are higher than the interest rate of an already issued bond, would one have to pay a
    premium or discount to buy the already issued bond?
111.    Who usually buys munis and for what reason?

112.   What are mutual funds? How many different types are there in the US?
113.   What are the s the advantage of mutual funds?
114.   What is a Load? What is a front load, back load, and no load fund? How do loads work?
115.   Why is a back load fund, in general, better than a front load fund?
116.   What type of companies do the following types of mutual funds invest in: aggressive funds, growth funds,
    growth and income funds, income funds, bond funds, balanced funds, money market mutual funds?
117.   What is the difference between an income fund and a bond fund?
118.   How many different funds do most Americans own? Why should someone buy more than one mutual fund?
119.   Are mutual funds taxable? Are mutual funds insured?
120.   If you have a long time horizon until your financial goal, what would a typical financial planner tell you
    should be the composition of your investment portfolio? What about in the medium term? If you only have a few
    more years until your financial goal, what type of funds should you own? What should you not own?

121.    What is a Traditional IRA? How much can you contribute per year? What type of investments can you
    invest in? At what age can you withdraw money without a financial penalty?
122.    There are 3 circumstances in which one can withdraw money EARLY from an IRA WITHOUT a penalty?
    What are they? How much is the penalty for an early withdrawal for other reasons?
123.    What is a Tax sheltered account? What is its advantage to a non-tax shelter?
124.    What does tax deferred mean? What is its advantage?
125.    A traditional IRA gives a tax break up front for contributions to investors who make under a certain income?
    What is that salary? Why does the government give such a tax break?
126.    What is a Roth IRA? How does it differ from a Traditional IRA?
127.    Do you get a tax break up front with a Roth IRA? Do you get a tax break in retirement with a Roth? Is a Roth
    IRA a tax shelter? What investments can you do in a Roth? Can you withdraw money early from a Roth? What
    happens if you make a large salary, do you still qualify for a Roth IRA?
128.    What is a 401K? Who can get one? Why do some companies offer a 401K? Is a 401k a tax shelter? Is a
    401k tax deferred? What happens if someone wants to withdraw money early from their 401K?
129.    How much can you contribute to your 401K? What can you invest in your 401K?
130.    What are stock options?
131.    What are matching funds in regards to 401ks?
132.    What is a rollover?
133.    Are 401Ks and IRAs insured?
134.    If you were offered a job for $45,000 per year with no 401k and another job for $42,000 per year that has a
    401k with matches contributions up to 50%, assuming all else is equal, which job should you take?