FINANCIAL LITERACY PRACTICE
EXERCISE AND ANSWERS.
Net Worth - Answers-Assets owned minus liabilities or debt
Stocks - Answers-Ownership of a corporation indicated by shares, which represent a
piece of the corporation's assets and earning.
Bonds - Answers-Debt securities issued by a corporation or unit of government to raise
money; an investor who buys a bond is a creditor of the issuer, but not an owner, as a
stockholder would be.
Portfolio - Answers-Total holdings of the securities, commercial paper, etc., of a
financial institution or private investor.
Risk - Answers-Danger or probability of loss.
Reward - Answers-Probability of gain or profit.
Volatility - Answers-Tending to vary often or widely, as in price of an investment.
Diversification - Answers-Investments distributed among several types, such as stocks,
bonds, mutual funds and cash accounts.
Return - Answers-What is gained on an investment
Dividends - Answers-Portion of a corporation's assets paid to stockholders on a per-
share basis.
Growth - Answers-Denoting a business, industry or equity security which increases or is
expected to increase in value over a long period of time.
Interest Rate - Answers-Percentage of the sum borrowed.
Discount Rate - Answers-Interest rate charged by Federal Reserve Banks on loans to
their member banks.
Stock Split - Answers-Division of outstanding shares of a corporation into a larger or
smaller number of shares
Interest - Answers-Sum paid or charged for the use of money or for borrowing money
EXERCISE AND ANSWERS.
Net Worth - Answers-Assets owned minus liabilities or debt
Stocks - Answers-Ownership of a corporation indicated by shares, which represent a
piece of the corporation's assets and earning.
Bonds - Answers-Debt securities issued by a corporation or unit of government to raise
money; an investor who buys a bond is a creditor of the issuer, but not an owner, as a
stockholder would be.
Portfolio - Answers-Total holdings of the securities, commercial paper, etc., of a
financial institution or private investor.
Risk - Answers-Danger or probability of loss.
Reward - Answers-Probability of gain or profit.
Volatility - Answers-Tending to vary often or widely, as in price of an investment.
Diversification - Answers-Investments distributed among several types, such as stocks,
bonds, mutual funds and cash accounts.
Return - Answers-What is gained on an investment
Dividends - Answers-Portion of a corporation's assets paid to stockholders on a per-
share basis.
Growth - Answers-Denoting a business, industry or equity security which increases or is
expected to increase in value over a long period of time.
Interest Rate - Answers-Percentage of the sum borrowed.
Discount Rate - Answers-Interest rate charged by Federal Reserve Banks on loans to
their member banks.
Stock Split - Answers-Division of outstanding shares of a corporation into a larger or
smaller number of shares
Interest - Answers-Sum paid or charged for the use of money or for borrowing money
