FBLA Securities and Investments

A company pools money from many investors and invests the money in securities such as stocks, bonds, and short-term debt. This is an example of

Mutual Fund

What are the benefits of investing in the stock market?

Opportunities for growth, capital formation, liquidity, transparency, ownership with risks like volatility, fraud.

A life insurance policy that remains in effect for a specified period of time is _____ life.

Term

Bonds backed by collateral are

Secured bonds

The most popular types of swaps are _____ swaps.

Interest rate

The process by which investment earnings build up not only on the money originally invested but also on the earnings and gains made in previous years is known as

Compounding

The amount a bond holder will be repaid when the bond matures or is due is the ____ value.

Face

Which of the following stocks tend to have the greatest risk?

Speculative

A company-sponsored retirement plan that specifies a minimum contribution, but no promise of a particular benefit at retirement is the

Defined contribution plan

Which of the following is an example of a data breach?

A theft of company information

Insider trading in the stock market has

Legal and illegal components

Which of the following statements about growth stocks is true?

They grow at a rate significantly above the average growth for the market

A method of spreading individual risk among a large group of people to make losses more affordable for all is referred to as

Insurance

Which of the following are precious metals

Gold, silver, and platinum

A statement that must be filed annually with the SEC by all firms having securities listed in a securities exchange or traded in the OTC market is the

Form 10-K

A mutual fund that invests in a mixture of stocks and bonds to minimize risk is a ____ fund.

Balanced

Treasury bills mature in

One year or less

Providing false information when applying for programs or services, forging, or selling prescription drugs, using transportation benefits for non-medical related purposes, and loaning or using another’s insurance card are examples of _____ fraud.

Healthcare

Which of the following lists the lower price the stock reached and the highest price the stock reached over the past 52 weeks:

52-week range

Which of the following statements about U.S. saving bonds is true:

They are typically not sold at a discount

To avoid inheritance taxes, a farmer transfers their property to the children while still alive through a

Trust

Insurance that protects renters from property and liability risks is ______ insurance.

Renters

One of the primary benefits of stock investing is to

Stay ahead of inflation

The price to buy a security is the ____ price.

Ask

The market value of the securities that a mutual fund has purchased minus any liabilities owned is called the _____ value.

Net asset

Principle x Rate x Time is the equation for ____ interest.

Simple

The rule requiring senior executives to disclose critical information simultaneously to investment professionals and the public via press releases or SEC filings is the

Fair disclosure rule

Buying stock from the corporation through no use of a middle person is a

Direct investment

Transaction costs are a problem with

Day trading

Funds that continually bring in new investors and new investment capital rather than being closed at some point where they no longer bring on new investors or capital are known as ____ funds.

Open-end

What prohibits the unauthorized sale or transfer of confidential phone record information by any person or the purchase or receipt of such information with knowledge that it was fraudulently obtained or obtained without prior authorization

Telephone records and privacy protection act of 2006

Which of the following type of trust provides a prearranged mechanism that will ensure the continued management and preservation of your assets, should you become disabled

Revocable

Mortgages may include a(n) _____ amount each month to cover property taxes and insurance for the home

Escrow

Which of the following statements about derivatives is true:

They derive their value from an underlying asset, group of assets, or benchmark

The financial statement showing the value of your stocks is the

Balance sheet

Which of the following is a single payment loan where the home can be used as collateral and where an owner can borrow against the equity they have built up:

Home-equity loan

Bonds issued to build schools and update infrastructure are known as _____ bonds.

Municipal

An organizational management activity that is used to set priorities, focus energy and resources, strengthen operations, ensure that employees and other stakeholders are working toward common goals, establish agreement around intended outcomes is known as

Strategic planning

A corporate bond that is not backed by collateral, but only by the general credit standing of the corporation, is a

Debenture

Which of the following are customized contracts traded in the over the counter (OTC) market privately:

Swaps

Which of the following is a secondary market:

New York Stock Exchange

A life insurance policy owner sells their policy to an investor in exchange for a lump sum payment. This is known as a _____ settlement.

Life

Which of the following is an example of a financial crime:

Committing embezzlement

Which of the following is an example of financial fraud:

Michael takes someone’s credit card without their permission

The financial process where interest is credited to an account based on both the original principal amount and interest already paid is called

Compound interest

Which of the following types of market experiences prolonged price declines:

Bear

Websites or apps that offer a variety of financial data and information In one place are known as

Financial portals

Which of the following is a fixed income investment in which an investor loans money to the government or a business:

Bond

A pooled investment fund that trades in relatively liquid assets and is able to make extensive use of more complex trading, portfolio-construction, and risk management techniques in an attempt to improve performance is known as a

Hedge fund

Which of the following is a primary market transaction:

Initial public offering

Which of the following allows individuals to contribute a limited yearly sum toward their retirement each year, with earnings tax-deferred until withdrawals begin at age 59 ½ or older:

IRA (Individual Retirement Account)

The home or real estate you purchase is often used as _______ when you take out a mortgage.

collateral

Using dividends previously earned on stock to buy more shares is an example of a

dividend reinvestment

A report published yearly by a publicly held corporation that contains a wide range of information, including financial statements for the most recent period of operation is the stockholder’s _________ report.

annual

Stockholders of _______ stock typically have no or limited voting rights in corporate governance.

preferred

Which of the following dates is when the bond pays out principal and interest payment cease:

Maturity

Which of the following is a company sponsored retirement plan that provides a monthly income in retirement:

Pension

Shares of ownership in a corporate or public body are called

stocks/shares

Money set aside for a college or a house is best described as

savings investments

Commodities are sold on the futures market. Which of the following is a type of commodity:

Wheat

The fixed interest rate that a bond issuer agrees to pay a bondholder each year is referred to as the

nominal yield

You can lend money to the federal government through the purchase of _______ bonds.

treasury

Which of the following is a nonprofit membership corporation, authorized by the federal government, that insures each brokerage customer’s account for up to $500,000, with claims for cash limited to $100,000 per customer:

Securities Investor Protection Corporation (SIPC)

The brokerage account of a minor requires a parent or guardian of all transactions. This is an example of a _________ account.

custodial

Income tax is an example of _______ tax.

progressive

You can buy and sell shares with the same account as you use to make your mortgage repayments, instead of having to keep separate accounts for each banking function with the

cash management account

A market characterized by rising prices and investor optimism is the ______ market.

bull

A time deposit, which is insured with a specific, fixed term and usually and a fixed interest rate is a

certificate of deposit

Stocks of large, well-established corporations, with a solid record of profitability are ______ stocks.

blue-chip

A percentage that the borrower for a mortgage must pay the lender to finalize the agreement is called a ______ cost.

closing

The financial statement that shows net profit or loss for a year is the

Income statement

Stocks trade on a(n)

exchange

An order to buy or sell a stock only if the price is within limits that you specify is a

limit order

Factual data on the past behavior of the economy, the market, the industry, the company, or a given investment is referred to as

Descriptive information

Which of the following is a benefit in the form of an option given by a company to an employee to buy a stock in the company at a discount or at a stated fixed price

stock option

Which of the following aims to mirror the performance of benchmarks such as the S&P 500 by mimicking their makeup

Index funds

The value of all assets (stocks) divided by the number of shares is referred to as

share price

A brokerage account in which a customer can make only cash transactions is the _____ account.

cash

Money that is made or gained as a result of an investment is

profit

Which of the following statement about compound interest is true:

It involves earning or owing interest on your interest

Which of the following is how mortgage payments are broken up over the life of the loan:

Amortization

Accumulated earnings and profits are calculated as E&P at the _______ of the year _____ current E&P ________ distributions to shareholders during the current period.

beginning;plus;minus

Preferred stock where missed dividends go into arrears and must be paid before the issuer may pay dividends to other preferred stock and/or common stock is ______ preferred stock.

cumulative

Which of the following is a financial derivative:

Future contracts

Which of the following savings products are purchased for 50% of face value:

EE bonds

Which of the following describes a mutual fund:

A pool of shareholder’s money invested by professional managers in an assortment of different securities

Which of the following describes a 401(k):

An employee-sponsored, tax deffered retirement plan

Loans where lending happens without the backing of equal value collateral are called

unsecured loans

A tight bid-ask spread indicates that a stock has

good liquidity

An agreement between a company and a policyholder where in return for regular payments, the company agrees to a specific period of time to provide insurance coverage to the policyholder and paying a given sum in their event of their deadline

life insurance

Alexa is the CEO of a large tech company. One day, when casually talking with her friend Terry, she tells him about a new product her company is developing that has a ton of promise. Terry, who is not affiliated with Alexa’s company, becomes, amount of stock before the news of the new products becomes a public. This is an example of

Insider trading

The price used on the settlement date of a particular contract is called

settlement price

The highest point in the business cycle is the

peak

A municipal bond that is backed by the issuer’s full faith and credit or full taxing authority is the _____ bond.

general obligation

Unregistered bonds that pay principal to the bearer at maturity are _______ bonds.

bearer

A corporation that is formed to own a collection of investments is called a(n)

Open ended investment company

The measurement of the value of stocks, usually divided into eighths, is called

point

Long-term debt securities issued by large firms are called

corporate bonds

Which of the following statement about the New York Stock Exchange is true:

It is the largest equity-based exchanges in the world