Assignment: Assets
Name:
Open and read this article from CNN Money.
A. As you read through create your own Glossary of at least 5 important terms used in the article. Then
define each term in your own words.
For example:
NASDAQ index: The NASDAQ index is one way to track world markets. Made up of a variety of large
stocks from a large variety of industries, these stocks are tracked constantly and give a steady, long
term indication of either the growth or decline of markets.
1.
2.
3.
4.
5.
B. Answer the following multiple choice questions. If you can’t activate the radio buttons, just highlight or
underline the correct answers.
6. Between 1990 and 1999, stocks rose at
19.4 percent
18.1 percent
15.3 percent
9.4 percent
7. If you're looking for a place to invest money you'll need to use in a year or two, stocks are the place
to be because they'll give you the best returns.
True
False
8. Which was the bigger stock market decline in percentage terms: the 508-point drop in the Dow
Jones Industrial average on Oct. 19, 1987, or the 544-point drop on Oct. 28, 1997?
The 508-point drop in 1987
The 544-point drop in 1997
9. 1994 was the worst year for bonds in recent history. How steep was the loss for intermediate-term
Treasuries?
Down 14.4 percent
Down 9.7 percent
Down 6.2 percent
Down 1.8 percent
10. The following year, those same bonds bounced back. What was their return in 1995?
Up 14.4 percent
Up 9.7 percent
Up 6.2 percent
Up 1.8 percent
11. U.S. Treasury bonds are generally considered the safest investments going. Why?
Because their interest payments are exempt from state and local taxes
Because the government can always print more money to make payments on them
Because they are guaranteed by the Securities Act of 1934
Because they are partially invested in the stock market
12. Index funds based on the S&P 500 outperform most actively-managed funds over time because:
They have low management fees
Few fund managers can consistently beat the market average
Their trading costs are minimal
All of the above
13. Global funds typically invest where?
In all parts of the world save for the U.S. market
In all parts of the world including the U.S. market
In all types of foreign investments, including stocks, bonds and real estate
Mostly in emerging markets
14. When the stock market is headed down, which of the following kinds of bonds typically prosper?
Treasury bonds
Corporate bonds
Junk bonds
None of the above
15. When investing in your 401(k), what should you worry about most?
A stock market crash
Falling interest rates
A bond market crash
Inflation