TEST INVESTING SAVVY - AND REDUCE RISKS IN THE MARKETPLACE

Investing for long-term goals such as buying a home, putting the kids through college or making retirement really be your "golden years," is the foundation of financial planning for all families.

Rather than "playing" the stocks and bonds markets, the successful investor has the courage to invest wisely - easy to say but not so easy to do considering that a conservative person's wise investment is a high-flyer's dead horse.Whether you are ultra-conservative or have a taste for running some risk in return for the possibility of a better-than-average return, the process of long-term investing involves not only goal-setting, but also educating yourself about the numerous types of investments available and becoming familiar with basic investment terminology.

To test your investment savvy, complete the quiz below, which was prepared by Jim Kuttner, an academic associate of the College for Financial Planning, a Denver-based organization that represents investment counselors holding the designation Certified Financial Planner. Choose only one answer for each question.

1. The Standard & Poor's 500 stock index contains:

a. industrial and transportation stocks only

b. industrial, transportation and utility stocks only

c. industrial, transportation, utility and financial stocks

2. U.S. Treasury Note interest payments are:

a. tax-free at the federal level but taxable at the state level

b. tax-free at the state level but taxable at the federal level

c. tax-free at both the federal and state levels

3. The lowest rating for investment-grade bonds is:

a. A

b. BBB

c. BB

4. The "face value" of a bond is:

a. the amount paid by the issuer when the bond matures

b. its price in the secondary market

c. the amount paid by the investor when the bond is issued.

5. "Registered" bonds are ones for which:

a. payment of a debt by the issuer is secured by insurance

b. coupons must be presented for payment of interest