MORE FACTS ABOUT INVESTINGPERSONAL FINANCE

EMERGENCY FUNDS

An ___________account needs to have a high degree of _______ and __________.

High safety means that there is very little chance of losing the _________ (dollar amount in the account).

High ________ means it is easy to get cash out of the account quickly.

CAPITAL GAIN

Money could also come from a ________on an investment that is sold.

Capital gains are the profits from selling an investment product and will ____ to financial assets.

CAPITAL GAINS

Capital ___ are ____ made from the sale of capital assets such as stocks and bonds and are _______until the asset is sold.

Capital assets that are held over _ year are considered ______ capital gains and are taxed at a ___ tax rate in some cases are ___ taxed at all.

CAPITAL LOSS

Capital ___ is the ____ in the value of assets between the purchase and sale date.

If someone buys a stock at $40 a share and sells it at $25 per share, the $15 per share ___ is considered a “capital ___” and therefore is money that no longer exists to be spend.

DIVERSIFICATION

___________ is dividing investment money among several different types of investments that have ______ risk levels as a way to reduce the portfolio’s market risk.

MARGIN

_____ is a _____ method whereby an investor borrows up to ___ of the money needed from a brokerage firm in order to buy a wanted stock and pays a fee for the privilege.

DIVIDEND REINVESTMENT PLANA __________________is designed to help the shareholder acquire __________ shares (or partial shares if there is not enough money) of the stock by immediately reinvesting the dividend in the same company’s stock as soon as the dividend is _____. The shareholder is still responsible for paying ____ on the ______ earned.

NEW YORK STOCK EXCHANGE (NYSE)The largest of these markets is the ______________. It was founded in 1792 under a tree on Wall Street. Also known as the "Big Board" and "the Exchange." the ___ has the most stringent listing requirements and is governed by a board of directors. Recent events have led the ____ to develop and enforce stricter rules of corporate governance.

AMERICAN STOCK EXCHANGE (AMEX)

_____________– the second largest stock exchange in the U.S. which trades stocks and bonds issued by smaller companies than the NYSE.

NASDAQ

_________________is the first electronic exchange where investors can buy and sell stocks.

STOCK SPLIT

A ______ is when the existing stock ____ into a larger number of shares and the price of each share is then _____ accordingly, i.e., a 2-for-1 split on 40 shares that is worth $80 would result in 80 shares at $40 at the time of the split.

STOCK SPLIT

Among other reasons, companies often decide to declare a stock ___ when they want to bring in more investors and do not want to issue more ____. Or, they believe that by bringing ___ the price of the stock through a stock split, that they will _____ activity and interest in the corporation’s stock.

COMPARISON______ have the _____ potential growth rate and the ______ risk of ____.

_____ accounts have ___ interest rates and the ____ potential growth rate.

Both ____ and _____ accounts are safe because they are FDIC _____ up to $250,000 per individual at one institution.

_____ have a much ____ potential growth rate than stocks, and there is ____ risk that the bondholder will not receive the bonds face value on maturity date.

CURRENT EVENTS - STOCKS

_____ events (for example, a war or major oil spill), investor confidence, and interest rate levels can all affect the financial markets in general as well as a specific company's stock or bond prices.

PLAYING IT SAFE!

Common stock, corporate bonds, and preferred stock are all issued by ____ corporations. If the corporation goes _____, your entire investment can be ____.

The U.S. government _____ that the principal and interest will be paid on U.S. _____ notes.

IRA SAVINGS ACCOUNT

If you withdraw money from a qualified retirement plan before you are __ years old, you have to pay ___ on the amount withdrawn and a __ percent penalty.

DEFINED-CONTRIBUTION PENSION PLAN

A company offers a ____-________ ____ plan which means that upon retirement the employee will receive the total amount of ___ contributed ____ investment _______.

INTEREST RATES

If you believe that interest rates are going to ___ in the near future and remain ___ for a considerable period of time.

It would be to your ______ to invest your money in a _______, ____ rate CD before the interest rate falls.

INTEREST RATERising interest rates can result in _____ business _____ as business has to pay more to borrow money.

RECEIVING A GIFT OF MONEY

Money and other items received from the ____ of a person who died is called an _________.

SAVINGS OR INVESTMENTSMONEY SET ASIDE TO GROW

Current _____ that is not spent on current _______ or ___________ income can be saved for ______ use.

It can be used to build an ________ fund to cover _____-term emergencies or invested for _____-term goals such as buying a house or retirement.

SAVING AND INVESTING_______ is setting aside present funds (____) for future use. ________ is committing money for the purpose of making a ____ over time. You can “__________," by putting it in interest-bearing savings accounts or by investing it in one or more types of financial instruments.

SAVING AND INVESTING

Financial advisors encourage everyone to “____________;" that is to put aside some funds into a ______ or _________ plan before spending money on anything else.

SOCIAL SECURITY SYSTEMIn terms of retirement income, a person should realize that the amount of money the person will receive from the __________System’s benefits depends on the person’s _____ over a ____ of ____.

The ___ of a person’s benefits depends on the ____ of time a person ____ into the system and the amount ____ into the system.

SALARIES, WAGES, AND TIPS

The primary ______ of ____ for most people between the ages of __ and __ are _____, ____, and ___.