Financial IQ Test  
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The net asset value (NAV) of a bond fund:

Cannot be determined.
Changes as interest rates change.
Is determined by the average coupon rates of the bonds in the fund.
Will not change as bonds in the fund are bought or sold.

The total stock market (S&P 500) return during the 1990s was:

Predicted by most Wall Street analysts at the beginning of the decade.
Lower than the historical average
The highest of any decade in the 20th century.
Approximately the same as the total return during the 1970s.

The astute investor is aware that:

Investment risk is limited to the fortunes of the specific security purchased.
Computers make investment decisions scientific and eliminate much of the risk.
Actual outcome of any investment may differ from the expected outcome.
When trading on-line, brokerage commissions are always negotiable.

A limit order:

Is used to protect a profit if it is a limit order to buy.
Is used to execute a sell at a specific price or lower if possible.
Is an order to buy or sell at a specific price or better and can be good till canceled.
Is an order to be executed at the best price available and is not known until after confirmation is received.

Buying on margin::

Precludes the advantage of using leverage.
Is not affected by limits on borrowing established by ERISA.
Minimizes losses if the price of a security declines.
Is possible by borrowing from a broker.

Mortgage payments:

Can be completely deducted from income for tax purposes.
Vary from month to month on a fixed rate loan.
Represent high principal payments early in the term of the loan.
Are typically tax deductible to the extent that they represent payment of interest.

Beta is commonly used as a relative measure of risk. It measures:

Standard deviation of a stock’s price.
The expected total returns of a diversified portfolio.
The unsystematic risk component of an investment.
The risk of a security or portfolio relative to the overall market.

Credit cards:

Are a cost effective way of financing investment purchases.
Have interest payments that are not tax deductible.
Typically have lower interest rates than home equity loans.
Often have 3 month grace periods on new purchases.

 
   
   
The AFP Group
1330 Post Oak Blvd., Suite 1370 • Houston, TX • 77056
Phone: 713-626-9820 • Fax: 713-561-8159

Certified Financial Planner Board of Standards Inc. owns the certification marks CFP®, CERTIFIED FINANCIAL PLANNER™ and federally registered CFP, which it awards to individuals who successfully complete initial and ongoing certification requirements. 

Gilbert J. Baker, Ann Baker Ronn, and Karin L. Tyson are Registered Representatives.  Securities are offered solely through Ameritas Investment Corp (AIC). Member FINRA/SIPC.  AIC and The AFP Group and AFP Investment Advisory, Inc. are not affiliated.  Additional products and services may be available through The AFP Group or AFP Investment Advisory, Inc. that are not offered through AIC.

In this regard, this communication is strictly intended for individuals residing in the states of  California, Colorado, Florida, Georgia, Louisiana, Maryland, New Mexico, Nevada, New York, Ohio, Oregon, Pennsylvania, Texas, Virginia and Washington. No offers may be made or accepted from any residents outside the specific states referenced.

Gilbert J. Baker, Ann Baker Ronn, and Karin L.Tyson are also separately registered as investment advisers under AFP Investment Advisory,Inc. a registered investment adviser, offering advisory services in the state of Texas. As such, these services are strictly intended for individuals residing in Texas.

This is not an offer of securities in any jurisdiction, nor is it specifically directed to a resident of any jurisdiction.  As with any security, request a prospectus from your registered representative. Read it carefully before you invest or send money.  A Representative from The AFP Group will contact you to provide requested information.  Representatives of AIC do not provide tax or legal advice.  Please consult your tax advisor or attorney regarding your situation. 

IMPORTANT CONSUMER INFORMATION:

A broker-dealer BD , investment adviser IA , a BD agent, or IA Representative may only transact business in a state if first registered in that state, or is excluded or exempt from registration in that state as a broker-dealer, investment adviser, BD agent or IA Representative, as appropriate. Follow-up, individualized responses to persons in a state by such a firm or individual that involve either affecting or attempting to affect transactions in securities, or the rendering of personalized investment advice for compensation, will not be made without first complying with appropriate registration requirements, or an applicable exemption or exclusion.

For Information concerning the license status or disciplinary history of a broker-dealer, investment adviser, BD agent, or IA rep, a consumer should contact his or her state securities law administrator.
 

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