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
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
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
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