Phase 3 Exam Review30 M/C, 30 T/F Questions

Chapters 13 - 18

Personal Financial PlanningFIN 235

Chapter 13: Investments

A. Saving v-v Spending and InvestingB. Importance of Goals and Time

Horizons in planning investment strategy

C. Difference between securities and other type of investments

1. Interest, Dividends, Capital Gains

D. Defining Income and Cash Flow from Real Estate investments.

E. Risk, Returns, and the Investment pyramid.

Chapter 14: Stocks and BondsA. Acquiring shares in Public v-v Private

Held CompaniesB. What are negotiable instrumentsC. Advantages of stock ownership from

risk perspective1. Importance of alpha measures2. Dividend yields

D. Use of proxiesE. Types of Bonds

1. Callable, Mortgage, Debentures

Chapter 15: Mutual Funds

A. Mutual Fund, Fund Families, Investment Companies

B. Advantages of Mutual FundsC. Importance of Net Asset Values for

open-ended mutual fundsD. Difference between Open-ended and

Closed end funds.E. Investment Objectives of REITs

Chapter 16: Real Estate and Other High Risk InvestmentsA. Liquidity and Real EstateB. Importance of Depreciation for rental

propertiesC. Establishing Value using Discounted

Cash Flow methodD. Measuring Cash Flow in RE

investmentsE. Components of Real EstateF. Rationales for Speculating in Real

Estate and High Risk Investments

Chapter 17: Retirement PlanningA. Recommended percentages of

income from retirement assets and social security.

B. Estimating social security benefits1. Eligibility requirements

C. Comparing regular IRAs to Roth IRAsD. Difference between Defined

Contribution and Defined Benefits plans

1. Contributory v-v Noncontributory plans

Chapter 18: Estate Planning

A. Important Terms / Concepts1. Probate2. Estate Planning3. Intestate4. Joint Tenancy with right of survival5. Contingent Beneficiaries6. Durable Power of Attorney