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Chapter 14 Review

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					   Chapter 14 Review
Mutual Funds & Other Types of
         Investments
       Personal Finance
                 1
• An individually owned unit in an
  apartment-style complex with
  shared ownership of common
  areas.
• Condo
                2
• Also known as a limited
  partnership.
• Real estate syndicate.
                 3
• A term for very risky investments.
• Speculative
                4
• Why are collectibles a speculative
  investment?
• Subject to consumer tastes
• Volatile prices
• Difficult to sell
                 5
• List an advantage of investing in
  mutual funds.
• Diversity
• Professional management
• Low initial investment
                 6
• The organizer of a real estate
  syndicate is called the general
  partner or ________.
• Syndicator
                  7
Mutual fund companies offer a
 variety of funds covering a whole
 range of investment objectives.
 The complete offering of a mutual
 fund company is their _________.

family of funds
                 8
• A building with two separate living
  quarters.
• Duplex
               9
• List a disadvantage to being a
  landlord.
• Tenants who don’t pay or damage
  property.
               10
• List an advantage to investing in
  real estate.
• Property usually appreciates at a
  rate higher than inflation
              11
• Why do banks ask for a larger
  down payment when a borrower
  is taking out a mortgage for a
  rental property?
• Risk
              12
• A term that means easy to
  convert to cash.
• Liquid
               13
• The investors in a real estate
  syndicate are called
  __________and are only liable for
  the amount of their initial
  investment.
• limited partners
              14
• List the 2 ways in which an
  investor can make money off of
  mutual funds.
• Dividends
• Capital gain
               15
• A corporation that pools the
  money of many individuals to
  invest in real estate.
• REIT
               16
• A fee that helps defray the costs
  of marketing and distributing a
  mutual fund.
• 12b-1 fee
             17
• The most commonly traded
  collectible.
• Coins
                18
• Another term for real estate.
• Real property
               19
• Other than coins, list an example
  of a collectible.
• Antiques, baseball cards
                20
• Why are municipal bonds less
  risky than corporate bonds?
• Municipal bonds are less likely to
  be defaulted on.
               21
• The goal of this type of mutual
  fund is to buy stocks that will
  increase in value over time.
  Investors hope to profit through
  capital gain, not dividends.
• Growth fund
              22
• What is capital gain?
• Income earned on an investment
               23
• ____________ is land and
  buildings that produce lease or
  rental income.
• Commercial property
               24
• An _______________ invests in
  stocks of new or out-of-favor
  companies and industries that the
  fund managers think will achieve
  above-average increases in
  value.
• aggressive growth fund
                25
• A term for a very risky bond.
• Junk bond
               26
• A legal document that offers
  securities or mutual fund shares
  for sale.
• Prospectus
              27
• A single-family home purchased
  to rent.
• Detached house
                28
• A decline in the value of property
  due to normal wear and tear.
• Depreciation
              29
• Vacant land or unimproved
  property.
• Raw land
                30
• List a disadvantage to investing in
  precious metals.
• Volatile prices
• Storage
               31
• If a mutual fund is purchased
  through a broker, you will pay a
  sales fee called a _____.
• Load
              32
• The NASDAQ contains this type
  of stocks.
• Many technology stocks among
  others.
               33
• These items are made valuable
  because they are old, no longer
  made, unusual, irreplaceable, or
  of historic importance.
• Collectibles
                34
• The goal of this type of mutual
  fund is to buy securities that pay
  dividends.
• Income fund
               35
• ________ are contracts to buy
  and sell commodities or stocks for
  a specified price on a specified
  date in the future.
• Futures
              36
• A sales charge paid when you
  buy an investment.
• Front-end load
              37
• An investment in a pool of
  mortgages that have been
  purchased by a government
  agency.
• Participation certificate
               38
• A mutual fund that attempts to
  minimize risk by investing in a
  mixture of stocks (preferred and
  common) and bonds (corporate
  and municipal) that provide both
  current income and growth.
• Balanced fund
              39
• The rent is enough to cover
  mortgage, taxes, and upkeep.
• Positive cash flow
                40
• A real estate investment that is
  similar to a mutual fund.
• REIT
               41
• A sales charge paid when you sell
  an investment.
• Back-end load
                42
• A _________________is a
  mutual fund whose investment
  goal is to earn returns from both
  dividends and capital gains.
• growth and income fund
               43
• The rent is not enough to cover
  costs.
• Negative cash flow
               44
• An __________is a mutual fund
  that tries to match the
  performance of a particular index
  by investing in the companies
  included in that index.
• Index fund
               45
• What type of securities would a
  Dow Fund contain?
• Blue Chips
               46
• Collects rent, hires and pays
  people to make repairs and
  maintain the property, charges a
  fee for his or her services, and
  remits the difference to the owner
  of the property.
• Property manager
               47
• A fund that does not charge a
  sales fee when you buy or sell
  because no sales people are
  involved. Funds are purchased
  directly from the company.
• No-load fund
               48
• A mutual fund that invests in
  bonds to try to achieve stable
  income with minimal risk.
• Bond fund
                49
• A landlord that lives at the
  property.
• Resident landlord
               50
• A mutual fund that purchases
  international stocks and bonds as
  well as U.S. securities.
• Global fund
  Final Question
• List and explain three different
  categories of mutual funds.

				
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