Buying stocks or corporate or government bonds is a way to invest in

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the capital market.

the credit market.

the labor market.

the buyers' market.

the sellers' market.

When your expenses are greater than your income you have

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		sufficient cash to cover expenses.
		more capital to sell.
		a budget deficit.
		a budget surplus.
		reduced consumption.

If you had a budget surplus, which of the following choices would best increase that surplus?

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		Increase spending
		Save and invest
		Work fewer hours
		Borrow more
		Change jobs

Cash or an asset that can be easily and quickly converted to cash is called

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		a liquid asset.
		a budget excess.
		selling capital.
		investing.
		income.

Which of the following assets reduces expenses but does not increase income or store wealth?

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		Home
		Land
		Car
		Money market account
		Savings account

If an asset is worth more when you re-sell it than when you bought it, then you have

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		a capital loss.
		a capital gain.
		a store of wealth.
		a reduction in expenses.
		excess capital.

The benefit of debt is that you can

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		use money later rather than now.
		defer payment of interest.
		own an asset without paying for it.
		use it to store wealth.
		use other people's money.

The best uses of debt include all the following EXCEPT

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		to finance an education.
		to cover a budget deficit.
		to purchase a car.
		to buy a house.
		to fund other investments.

When is the best time to get an education?

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		After you get a job
		When you can afford one
		Before you sell your labor
		When interest rates are low
		After you have saved enough

Sources of income may be diversified by

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		having more than one employer.
		having several bank accounts.
		managing risks.
		having fewer investments.
		decreasing expenses.

Investments in assets may be diversified by

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		holding a few stocks.
		investing in a variety of assets.
		eliminating investments that lose value.
		selling investments at a higher price.
		converting assets to cash.

The stocks in Wayne's investment portfolio lost value in the recession, but he also had CDs and a savings account. The effect of his investment diversification on his finances was to

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		increase spending.
		reduce risk.
		increase income.
		reduce cost.
		increase variety.

Factors to consider when deciding to borrow capital include

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		costs in relation to the asset's value.
		the risk of costs exceeding benefits.
		the interest rate, and time to repay.
		a. and b.
		a., b., and c.