Investment Jeopardy Joan Koonce, Ph.D., AFC Extension Financial Planning Specialist Terminology & Concepts Stocks Bonds Mutual Funds Emergencies, Education & Retirement back This represents the total value (in percentage terms) of what you earn on your investments. What is rate of return? Terminology & Concepts - 100 back Dividends, interest and rent are examples of this. What is investment income? Terminology & Concepts - 200 back Doing this to your investment portfolio will reduce risk, but it will also reduce return. What is diversifying? Terminology & Concepts - 300 back This is what you are doing when you invest an equal amount of money at regular intervals. What is dollar-cost averaging? Terminology & Concepts - 400 back This is your inability to convert your investments to cash without a capital loss. What is liquidity risk? Terminology & Concepts - 500 back This is what shares of stock represent to the buyer. What is ownership? Stocks - 100 back This is what you receive when you sell shares of stock for more than or less than you paid for them. What are capital gains and capital losses? Stocks - 200 back Stocks issued by well-known companies with sound financial histories are called this. What are blue-chip stocks? Stocks - 300 back These stocks are issued by companies whose earnings tend to move inversely to the broader economy and may actually increase during economic downturns. What are defensive stocks? Stocks - 400 back For a fee, these two plans allow shareholders to purchase stock directly from the company. What are Dividend Reinvestment Plans (DRIPs) and Direct Stock Purchase Plans (DSPP) or Direct Investment Plans (DIPs)? Stocks - 500 back You are doing this when you invest in bonds. What is loaning money? Bonds - 100 back The amount returned to the bondholder at maturity is called this. What is face value or par value? Bonds - 200 back This is what bonds issued by the state and local government are called. What are municipal bonds or munis? Bonds - 300 back This does not have to be paid on interest earned on treasury bills, notes and bonds. What is state income tax? Bonds - 400 back Bond rating companies rate bonds based on this risk. What is default risk? Bonds - 500 back A mutual fund is this type of company. What is an investment company? Mutual Funds - 100 back These are sales commissions charged to the investor of a mutual fund. What are loads? Mutual Funds - 200 back These funds invest in short-term securities such as treasury bills and certificates of deposit. What are money market mutual funds? Mutual Funds - 300 back The primary objective of these funds is preservation of capital invested. What are balanced mutual funds? Mutual Funds - 400 back The name of the fees mutual fund investors are charged for fund management and fund advertising and marketing. What are management fees and 12b-1 fees? Mutual Funds - 500 back Because liquidity is important for this type account, money market accounts and short-term certificates of deposit are good choices. What is an emergency account? Investing for Emergencies, Education & Retirement - 100 back Contributions to this retirement account are not tax deductible, but earnings are tax-free. What is a Roth IRA? Investing for Emergencies, Education & Retirement - 200 back If you have this type of employer- sponsored retirement plan, your benefit payment is based on the account balance at retirement. 401(k), 403(b) and 457 plans are examples of this type plan. What is a defined-contribution plan? Investing for Emergencies, Education & Retirement - 300 back With this type of employer-sponsored retirement plan, the benefit payment that you receive at retirement is specified based on the plans formula. The Teachers Retirement System (TRS) and Employee Retirement System of Georgia (ERSGA) are examples of this type plan. What is a defined-benefit plan? Investing for Emergencies, Education & Retirement - 400 back These education plans have tax-deferred growth and distributions from these plans are excludible from gross income if used to pay certain educational expenses. What are qualified tuition plans or 529 plans? Investing for Emergencies, Education & Retirement - 500 back ASK-UGA1