Explain the differences between stocks, bonds and mutual funds. Which would you choose and why?

Explain the differences between stocks, bonds and mutual funds. Which would you choose and why?

· Stocks - An investment that represents ownership in a company or corporation.

· Bonds - A security representing a loan of money from a lender to a borrower for a set time period, which pays a fixed rate of interest.

· Mutual fonds - An investment that pools money from several investors to buy a particular type of investment, such as stocks.

The reason that most individuals are in debt is due to the overuse as well as the irresponsible use of credit cards. This is the fault of the individual, not the credit card companies/banks. Do you agree with statement? Why or Why not?

· One of the most frequent negative comments I get on The Simple Dollar relates to credit card usage. I often advocate using credit cards for their purchasing convenience and rewards points, then paying off the whole balance each month. In effect, this means that I use a credit card as an extension of my checking account, albeit one that earns rewards for me. Over the course of the last six months using this strategy, I’ve earned about $500 in car rebates using my Citi Driver’s Edge card – and I’m carrying no balance at all. That $500 will go toward the purchase of a new car in the future.

o So what’s wrong with that? There’s a rather vocal group of people out there who basically state that credit cards are completely unnecessary, some even going so far as to decry them as evil. Take this recent comment from Kerry on my article about a financial recovery toolkit:

o You mentioned that you put your credit cards in your top dresser drawer and then over time were able to put them back in your wallet. Why not destroy them completely and close the accounts?

o If you cannot pay cash for something, then you do not need it.

o Along these same lines, individuals like Dave Ramsey and blogs like No Credit Needed follow that same philosophy: no credit cards, period.

· And then there’s the other group… Part of the reason that the anti-credit card group is so fervently opposed to credit cards is because it is incredibly easy to lose track of the connection between plastic and real money, and when that connection is lost, it’s incredibly easy to get into a dangerous debt situation.

In class we discussed “Corporate Scandals” (Also on the website). Please give an example of a “Corporate Scandal” from the lecture or the website. Summarize what happened.

In class, we discussed the “The Economic Crisis of 2008” and the potential causes. Please summarize how the economic crisis began and what were some of the causes.

Please choose two of the corporate crimes that we discussed in class. Please define each crime. In your opinion, which crime is more detrimental to society or to the economy and why?

Please choose a short-term and a long-term investment strategy. Explain each type that you have chosen. Which would you select and Why?

· Long-term Investment Strategies - Diversification is spreading your assets among different types of investments to reduce risk.

-Don’t put all your eggs in one basket.

- Dollar Cost Averaging is buying an equal amount of the same stock at equal intervals.

– Invest $100 in e-bay every month. The price you pay for the stock averages out over time.

- Buy and hold technique is where an investor buys stock and holds on to it for a number of years.

– During that time you are paid dividends and the price of the stock may go up.

Discuss the three types of Insurance that we reviewed in class. Please give an example of each.

- Property Insurance (protection from financial loss when things you own are stolen, damaged, or destroyed)

- Liability Insurance (protects you from loss that you cause others)

- Personal Insurance -Health and Life (protects you and your family from loss due to illness, disability, or death)