It’s Been a MEMORY-able Year

It’s Been a MEMORY-able Year

It has been another productive year for The Sense. We are thrilled to continue spreading the wealth of personal finance empowerment to people of all ages, in every stage of life. As we take on this next year, we want you to test your financial knowledge! What better time to see where you’re at and all the potential you have to grow come the new year.


1. A person or entity that owes a heightened sense of responsibility to another.  On with an ethical and, in some cases, legal responsibility to put another’s best interests above their own.  Examples include attorney to client, trustee to beneficiary and investment advisor to client.

a) A Suitability

b) A Fiduciary

c) A Friend


2. An investment approach that analyzes businesses rather than focusing on an industry or the economy.  An investor using this approach will analyze a company’s financial statements, products and services, management, competitive advantages and other factors that may affect performance.

a) Bottom-Up Investing

b) Company-Based Investing

c) Boutique Investing


3. A hypothetical set of individual stocks, bonds or other investment types used as a reference for a similarly invested portfolio’s performance.

a) ETF

b) Index

c )Mutual Fund


4. Often added to homeowners or renter’s insurance, a provision that provides additional coverage for certain items that are worth more than the per-item limit in the policy. Common items that are scheduled in this way include jewelry, art and antiques.

a) Insurance Add-on

b) Property Rider

c) Specialty Items Premium


5. Used to determine the affordability of a home, based on pre-tax income.  It is determined by dividing the annual cost of a home – including principal, interest, property taxes, insurance and association fees – by annual pre-tax income.  Financial planners generally recommend 28% or lower.

a) Housing Ratio

b) Loan Ratio

c) PE Ratio


6. A legal process in which a court determines the validity of a deceased person’s will.  It also includes the administration of a deceased person’s estate by the appointed executor (named in the will) or an administrator (named by the court in absence of a will).  Estate administration includes collecting assets, paying liabilities and taxes and distributing property to heirs.

a) Living Trust

b) Power of Attorney

c) Probate


7. The tendency for people to let others impair independent decision making. When thinking in this way, investment decisions are based on the thoughts and actions of other investors, which results in a gravitation toward the same investments. The psychology stems from fear of missing out on what others are doing.

a) Bull Mentality

b) Herd Mentality

c) Risk Averse Mentality


8. A term used to describe the tax treatment of certain expenses or savings plan contributions.  Amounts spent on allowable expenses or contributed to certain retirement plans may reduce the amount of income subject to taxation.  Common expenses include mortgage interest and property taxes paid.  Popular retirement plan contributions include those made to 401(k) plans and traditional IRAs.

a) Tax allowable

b) Tax deductible

c) Tax exemption


9. The return of an investment or portfolio, expressed as an average per-year return.

a) Portfolio gains

b) Beta

c) Annualized returns


10. A charitable giving vehicle that allows donors to manage donations to desired charities.  Donations are tax-deductible (for taxpayers that itemize) and await instruction from the donor on when to grant the money to charity.  Think of this as a pass-through charity that allows a current-year income tax deduction and donations at the discretion of the donor.  Funds are invested and have the potential to grow tax-free while donors are deciding on which charities to support.

a) Donor-Advised Fund

b) 501(c)(3) stock

c) Charity Fund


Answers: 1(b), 2(a), 3(b), 4(b), 5(a), 6(c), 7(b), 8(b), 9(c), 10 (a)