Podcast
Play an AI-generated podcast conversation about this lesson
Questions and Answers
What defines a Certificate of Deposit (CD)?
What defines a Certificate of Deposit (CD)?
- An investment account that allows daily withdrawals without penalties.
- A type of mutual fund that pools money for high-risk stocks.
- A government-issued bond that funds private projects.
- An account that holds a fixed amount of money for a set period, in exchange for interest. (correct)
What is a Municipal Bond primarily used for?
What is a Municipal Bond primarily used for?
- To fund local projects by local governments. (correct)
- To raise capital for corporate expansions.
- To secure loans from private investors at high interest.
- To provide dividends to shareholders annually.
What are dividends?
What are dividends?
- Interest earned from a savings account.
- The capital gained from selling an asset at a higher price.
- Loans taken by corporations from investors.
- Payments made to shareholders from a company's profits. (correct)
What is the primary function of a 401(k)?
What is the primary function of a 401(k)?
Signup and view all the answers
What is meant by Capital Gains?
What is meant by Capital Gains?
Signup and view all the answers
Study Notes
Certificate of Deposit (CD)
- Fixed sum of money held for a specific time period
- Earns interest
Municipal Bond
- Issued by local, county, or state governments
- Funds local projects
- Not taxed at the federal level
Stock
- Represents ownership in a company
- Gives the owner a claim to the company’s assets and earnings
Bond
- Loan from an investor to a borrower (government, corporation, or municipality)
- Repaid with interest after a specified period
Dividends
- Regular payments (typically quarterly) made by a company to shareholders
- Paid from profits or reserves
401(k)
- Retirement savings plan
- Employees contribute and invest a portion of their paycheck tax-free
Capital Gains
- Profit from selling property or an investment
Mutual Fund
- Pool of money from multiple investors
- Used to buy stocks, bonds, and other investments
- Managed by professionals who choose investments
Savings Account
- Holds money not intended for immediate spending
- Earns moderate interest
- Money can be withdrawn at any time
Studying That Suits You
Use AI to generate personalized quizzes and flashcards to suit your learning preferences.
Description
Test your knowledge on various financial instruments including certificates of deposit, municipal bonds, stocks, and more. This quiz covers essential concepts that are crucial for understanding personal finance and investing. Perfect for students and anyone interested in finance!
