FINANCIAL PLANNING INVESTING
EXAM QUESTIONS AND ANSWERS
Stock Market - ANSWER-public entity for the trading of company stock at an agreed
price; these have securities listed on a stock exchange as well as those only traded
privately
401k - ANSWER-type of employer-sponsored defined contribution retirement plan
Individual Retirement Account (IRA) - ANSWER-tax-deferred retirement plan account
that provides some tax advantages for retirement savings in the US
Pension - ANSWER-steady income given to a person usually after retirement, created
by an employer for the benefit of an employee
Roth IRA - ANSWER-individual retirement account that provides tax-free growth, with
contributions to the account made post-tax
Social Security - ANSWER-social insurance program funded through dedicated payroll
taxes called the Federal Insurance Contributions Act
Account Executive - ANSWER-an employee who is responsible for managing a number
of accounts as well as developing new accounts to the firm
Certified Financial Planner - ANSWER-certification mark for financial planners conferred
by the Certified Financial Planner Board of Standards
Diversification - ANSWER-strategy of pursuing an assortment of investments to
minimize the effects of risk and volatility
Income Investment - ANSWER-any investment that is considered safer than average,
with a lower potential for return
Ex.) savings accounts
Liquidity - ANSWER-the ease with which an investment can be converted into cash
Credit Union - ANSWER-privately owned and controlled by its members, differs from
banks because the members who have accounts in this are the owners of it
Passbook Savings - ANSWER-account that pays interest but cannot be used directly as
money, these accounts let customers set aside a portion of their liquid assets
Thrift - ANSWER-financial institution that specializes in accepting savings deposits an
making mortgage loans
EXAM QUESTIONS AND ANSWERS
Stock Market - ANSWER-public entity for the trading of company stock at an agreed
price; these have securities listed on a stock exchange as well as those only traded
privately
401k - ANSWER-type of employer-sponsored defined contribution retirement plan
Individual Retirement Account (IRA) - ANSWER-tax-deferred retirement plan account
that provides some tax advantages for retirement savings in the US
Pension - ANSWER-steady income given to a person usually after retirement, created
by an employer for the benefit of an employee
Roth IRA - ANSWER-individual retirement account that provides tax-free growth, with
contributions to the account made post-tax
Social Security - ANSWER-social insurance program funded through dedicated payroll
taxes called the Federal Insurance Contributions Act
Account Executive - ANSWER-an employee who is responsible for managing a number
of accounts as well as developing new accounts to the firm
Certified Financial Planner - ANSWER-certification mark for financial planners conferred
by the Certified Financial Planner Board of Standards
Diversification - ANSWER-strategy of pursuing an assortment of investments to
minimize the effects of risk and volatility
Income Investment - ANSWER-any investment that is considered safer than average,
with a lower potential for return
Ex.) savings accounts
Liquidity - ANSWER-the ease with which an investment can be converted into cash
Credit Union - ANSWER-privately owned and controlled by its members, differs from
banks because the members who have accounts in this are the owners of it
Passbook Savings - ANSWER-account that pays interest but cannot be used directly as
money, these accounts let customers set aside a portion of their liquid assets
Thrift - ANSWER-financial institution that specializes in accepting savings deposits an
making mortgage loans
