Chapter 14 ReviewMutual Funds & Other Types of

InvestmentsPersonal Finance

1• An individually owned unit in an

apartment-style complex with shared ownership of common areas.

• Condo

2• Also known as a limited

partnership. • Real estate syndicate.

3• A term for very risky investments.• Speculative

4• Why are collectibles a speculative

investment?• Subject to consumer tastes• Volatile prices• Difficult to sell

5• List an advantage of investing in

mutual funds. • Diversity• Professional management• Low initial investment

6• The organizer of a real estate

syndicate is called the general partner or ________.

• Syndicator

7Mutual fund companies offer a

variety of funds covering a whole range of investment objectives. The complete offering of a mutual fund company is their _________.

family of funds

8• A building with two separate living

quarters. • Duplex

9• List a disadvantage to being a

landlord.• Tenants who don’t pay or damage

property.

10• List an advantage to investing in

real estate.• Property usually appreciates at a

rate higher than inflation

11• Why do banks ask for a larger

down payment when a borrower is taking out a mortgage for a rental property?

• Risk

12• A term that means easy to

convert to cash.• Liquid

13• The investors in a real estate

syndicate are called __________and are only liable for the amount of their initial investment.

• limited partners

14• List the 2 ways in which an

investor can make money off of mutual funds.

• Dividends• Capital gain

15• A corporation that pools the

money of many individuals to invest in real estate.

• REIT

16• A fee that helps defray the costs

of marketing and distributing a mutual fund.

• 12b-1 fee

17• The most commonly traded

collectible.• Coins

18• Another term for real estate.• Real property

19• Other than coins, list an example

of a collectible.• Antiques, baseball cards

20• Why are municipal bonds less

risky than corporate bonds?• Municipal bonds are less likely to

be defaulted on.

21• The goal of this type of mutual

fund is to buy stocks that will increase in value over time. Investors hope to profit through capital gain, not dividends.

• Growth fund

22• What is capital gain?• Income earned on an investment

23• ____________ is land and

buildings that produce lease or rental income.

• Commercial property

24• An _______________ invests in

stocks of new or out-of-favor companies and industries that the fund managers think will achieve above-average increases in value.

• aggressive growth fund

25• A term for a very risky bond.• Junk bond

26• A legal document that offers

securities or mutual fund shares for sale.

• Prospectus

27• A single-family home purchased

to rent.• Detached house

28• A decline in the value of property

due to normal wear and tear. • Depreciation

29• Vacant land or unimproved

property. • Raw land

30• List a disadvantage to investing in

precious metals.• Volatile prices• Storage

31• If a mutual fund is purchased

through a broker, you will pay a sales fee called a _____.

• Load

32• The NASDAQ contains this type

of stocks.• Many technology stocks among

others.

33• These items are made valuable

because they are old, no longer made, unusual, irreplaceable, or of historic importance.

• Collectibles

34• The goal of this type of mutual

fund is to buy securities that pay dividends.

• Income fund

35• ________ are contracts to buy

and sell commodities or stocks for a specified price on a specified date in the future.

• Futures

36• A sales charge paid when you

buy an investment. • Front-end load

37• An investment in a pool of

mortgages that have been purchased by a government agency.

• Participation certificate

38• A mutual fund that attempts to

minimize risk by investing in a mixture of stocks (preferred and common) and bonds (corporate and municipal) that provide both current income and growth.

• Balanced fund

39• The rent is enough to cover

mortgage, taxes, and upkeep. • Positive cash flow

40• A real estate investment that is

similar to a mutual fund.• REIT

41• A sales charge paid when you sell

an investment. • Back-end load

42• A _________________is a

mutual fund whose investment goal is to earn returns from both dividends and capital gains.

• growth and income fund

43• The rent is not enough to cover

costs. • Negative cash flow

44• An __________is a mutual fund

that tries to match the performance of a particular index by investing in the companies included in that index.

• Index fund

45• What type of securities would a

Dow Fund contain?• Blue Chips

46• Collects rent, hires and pays

people to make repairs and maintain the property, charges a fee for his or her services, and remits the difference to the owner of the property.

• Property manager

47• A fund that does not charge a

sales fee when you buy or sell because no sales people are involved. Funds are purchased directly from the company.

• No-load fund

48• A mutual fund that invests in

bonds to try to achieve stable income with minimal risk.

• Bond fund

49• A landlord that lives at the

property. • Resident landlord

50• A mutual fund that purchases

international stocks and bonds as well as U.S. securities.

• Global fund

Final Question• List and explain three different

categories of mutual funds.