Business | Graded Assignment | Section 4 Study Questions

Name: Date:

Graded Assignment
Section 4 Study Questions
Instructions
Save the file in your Finance folder, and name it with Study, the section number, and your first initial and last
name. For example, Jessie Robinson's study questions for Section 1 would be named Study1JRobinson.
Answer the questions for each lesson on the same day that you read the lesson. Save the file before closing it
each day. Then turn in your answers to the study questions at the end of the section. Review Lesson 4 of the
Course Overview for instructions about turning in your study questions.

Assignment
Total score: ____ of 12.0 points

Answer each question fully. Complete sentences are not necessary.

Lesson 1
(Score for Question 1: ___ of 0.5 points)

1. What is a money market account?

Answer:
A money market is essentially a hybrid between a checking and savings account.

(Score for Question 2: ___ of 0.5 points)

2. What is a liquidation policy?

Answer:
A policy that tells you when and how you’re able to remove money from the account.

(Score for Question 3: ___ of 0.5 points)

3. What is simple interest?

Answer:
Simple interest is calculated by multiplying the daily interest rate by the principal, by the number of

days that elapse between payments.

(Score for Question 4: ___ of 0.5 points)

4. What is compound interest?

Answer:
Compound interest is interest calculated on the initial principal.

(Score for Question 5: ___ of 0.5 points)

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 Business | Graded Assignment | Section 4 Study Questions

5. What is the time value of money?

Answer:
Is the concept that money available at the present time is worth more than the identical sum in the future

due to its personal earning capacity.

(Score for Question 6: ___ of 0.5 points)

6. Name a strategy for saving money.

Answer:
Track your spending

Lesson 2
(Score for Question 1: ___ of 0.5 points)

1. What is investing?
Answer:
Investing is the act of allocating funds to an asset or committing capital to a business or project with the

expectation of generating an income or project.

(Score for Question 2: ___ of 0.5 points)

2. What is financial risk?

Answer:
Is any of various types of risk associated with financing.

(Score for Question 3: ___ of 0.5 points)

3. What is diversification?
Answer:
Is a corporate strategy to enter a new market or industry in which the business doesn’t currently operate.

(Score for Question 4: ___ of 0.5 points)

4. What is risk tolerance?

Answer:
Is how much of a loss you’re prepared to handle within your portfolio.

(Score for Question 5: ___ of 0.5 points)

5. What are debt investments?

Answer:
Debt investments are financial assets that define the terms of a loan between an issuer and an investor.

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 Business | Graded Assignment | Section 4 Study Questions

(Score for Question 6: ___ of 0.5 points)

6. What are equity investments?

Answer:
Is money that is invested in a company by purchasing shares of that company by purchasing shares of

that company in the stock market.

Lesson 3
(Score for Question 1: ___ of 0.5 points)

1. What are stocks?

Answer:
Is a type of security that signifies proportionate ownership in the issuing corporation.

(Score for Question 2: ___ of 0.5 points)

2. What are bonds?

Answer:
Is debt security, under which the issuer owes the holders a debt and is obliged to pay the interest.

(Score for Question 3: ___ of 0.5 points)

3. What is fraud?
Answer:
Fraud is a wrongful or criminal deception intended to result in financial or personal gain.

(Score for Question 4: ___ of 0.5 points)

4. What is an annuity?
Answer:
Is a contractual arrangement with an insurer to exchange an upfront premium for future payments.

(Score for Question 5: ___ of 0.5 points)

5. What is microfinance?
Answer:
Is a category of financial services targeting individuals and small businesses who lack access to

conventional banking and related services.

(Score for Question 6: ___ of 0.5 points)

6. What is venture capital?

Answer:
Is a form of private equity and a type of financing that investors provide to startup companies.

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 Business | Graded Assignment | Section 4 Study Questions

Lesson 4
(Score for Question 1: ___ of 0.5 points)

1. What is a 401(k) account?

Answer:
Is a retirement savings plan sponsored by an employer.

(Score for Question 2: ___ of 0.5 points)

2. What is a mutual fund?

Answer:
Is a professionally managed investment fund that pools money from many investors to purchase

securities.

(Score for Question 3: ___ of 0.5 points)

3. What is a broker?
Answer:
Is an individual or firm that charges a fee or commission for executing buy and sell orders submitted by

an investor.

(Score for Question 4: ___ of 0.5 points)

4. Name a stock market indicator in the U.S.

Answer:
Dow Jones Industrial Average

(Score for Question 5: ___ of 1.0 points)

5. Name at least two pieces of information that might be found in stock listings.
Answer:
Bid price and ask price

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