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TO CHECK IF YOU ARE A WHIZ QUICK QUIZ

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                                                                                               SENSIBLY FIT


QUICK QUIZ TO CHECK IF YOU ARE A WHIZ
Are you a financial whiz? To find out, select the correct definitions from the
two options provided with each of the words below. By Marc Schroeder,
Financial Advisor, NFB


G
         ive yourself two points for every b) and a       or insurance policy at the time they sell it to you.
         minus point for every a) you select. A
         score of 42 makes you a financial whiz.          Future: a) a time when everything will be better; b)
(Anything else makes you either a chump or a              a contract to buy or sell something for less or more
cheat.)                                                   than what you think it will be in the future.

Amortisation: a) something that happens after you         Gilt: a) what makes a Catholic go to confession; b)
die; b) the process by which the decrease in value        a government bond, also known as a risk-free
of an asset is calculated.                                bond.

Bear: a) what you are without clothes (grizzly?); b)      Gross: a) ugly people kissing; b) an amount before
a pessimistic outlook on the market.                      tax is deducted.

Beta: a) what you think you are relative to               Hedging: a) that thing you do to get a peek at
everyone else; b) the volatility of a specific            your neighbour's wife when she sunbathes topless;
instrument relative to the volatility of the market in    b) taking two positions that will offset each other,
which it trades.                                          thereby limiting financial risk.

Bond: a) James ... ; b) a loan to be repaid at a          Illiquid: a) your house right now; b) assets that are
specific time with interest.                              not easily converted to cash.

Bridging: a) shopping for false teeth (as in, "Shall we   Junk bond: a) mortgage on a Chinese boat; b)
go bridging this afternoon?"); b) a type of loan or       bonds (see above) that offer high interest but are
financial arrangement.                                    high risk.

Bull: a) most earnings' forecasts; b) the opposite of     Leverage: a) something that's making investment
a bear.                                                   bankers queasy; b) the borrowed portion of a
                                                          transaction.
Churning: a) the state of your stomach if you're
long banks; b) what stockbrokers do to their clients'     Mutual: a) how they feel about you too; b) a
portfolio to raise their commissions.                     company that shares its profits with its customers, or
                                                          "members".
Dead cat bounce: a) what happens to cats that
die in mid-air; b) a temporary recovery in the            Negative equity: a) bad karma; b) the difference
market following a long and pronounced period of          between your home loan and what your house is
decline.                                                  worth these days.

Endowment: a) something the opposite sex wants,           Option: a) wishful thinking; b) the right to buy or sell
and you don't have; b) investments that are               something at a given price on a certain date.
supposed to provide insurance and/or retirement
funds.                                                    Preference: a) the reason she won't go out with
                                                          you; b) a share that pays a fixed rate of interest
Front-end loading: a) that thing you do to your           and puts you at the front of the queue if things go
underwear; b) a fee that advisers stick on to a fund      badly wrong.



8      sensible finance december08

				
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