How do bond ratings work?

The higher the bond rating, the lower the interest rate

One way people can earn money from stocks is by

selling the stock for a higher price than price they paid

What are stock markets?

Places or ways in which people buy and sell stocks

Part ownership of a corporation

A certificate representing a loan to a corporation or gov't

An order to buy or sell a stock at the market means to buy or sell the stock

at whatever price is currently set by the market

What is an advantage of buying a mutual fund?

Allow investors to spread risk among several stocks and bond

Issued by local governments to raise money for roads, bridges, etc.

What are municipal bonds?

Bonds issued by state and local governments

What is a stock dividend?

Part of a company's profit that is paid to owners

The ability to turn your money into cash or spendable funds

Generally speaking, what does the term "asset allocation" in an investment account mean?

The proportion of stocks and bonds or other assets in a portfolio.

What is the relationship between the expected rate of return and the investment risk?

Greater the risk, the greater the expected rate of return

What is a mutual fund?

A pool of money used to buy a variety of stocks and bonds

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Stocks, Bonds, and Mutual Funds

36 termsStudBud Administration57 plays

#Stock Market #Finance #Stocks #Bonds #Mutual Funds

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Questions 36

Answers

1
An investment management company that pools the money of investors.
Mutual Fund
Roth IRA
Municipal bonds
Exchange Traded Funds
2
Bonds are a riskier investment than stocks
True
False
3
How do bond ratings work?
The lower the bond rating, the higher the interest rate
The higher the bond rating, the higher the interest rate
The higher the bond rating, the lower the interest rate
The lower the bond rating, the lower the interest rate
4
One way people can earn money from stocks is by
selling the stock for a higher price than price they paid
buying stock from an investment banker
selling the stock for a lower price as the price they paid
selling the stock for the same price as the price they paid
5
Which is the largest stock market in terms of stocks traded?
NASDAQ
NYSE
AMEX
6
What are stock markets?
Upscale boutiques selling and buying stocks
Stores in the mall specializing in stocks
Places or ways in which people buy and sell stocks
New York City discount stores
7
Which stock market is home to the Dow Jones and S&P 500?
NASDAQ
AMEX
NYSE
8
What is a stock?
Part ownership of a corporation
Money you receive from a corporation
Part of a corporation's profit
Above average returns on an investment
9
...is like a ruler, it's a way of measuring the performance or movement, of stocks and bonds.
A sector
Small Cap
Index
Large Cap
10
What is a bond?
A certificate of ownership with a percentage of the earnings
A certificate representing a loan to a corporation or gov't
A certificate of deposit
A group of stocks sold together for a set price
11
What does a full-service broker do that a discount broker does not do?
Charges a commission
Gives investment advice
Makes transactions in organized financial markets
Makes transactions in the over-the-counter market
12
The chances of losing part of all of your investment is called_____.
risk
impossible
trade
margin
13
Why do people buy stocks?
They expect to earn money
They are guaranteed interest payments each year
There is no chance of loss
The government encourages them to buy stock
14
An order to buy or sell a stock at the market means to buy or sell the stock
in the over-the-counter market
at whatever price is currently set by the market
as long as the price does not exceed a certain limit
at an organized financial market, such as the NYSE
15
Buying and selling stocks and bonds is referred to as...
bartering
consensing
negotiating
trading
16
Which investment is backed by the government?
Which investment is backed by the government?
Annuity
Mutual Fund
Treasury Bond
17
What is an advantage of buying a mutual fund?
All mutual funds are the same
Many mutual funds do not charge management fees
Allow investors to spread risk among several stocks and bond
Load funds do not charge a sales commission
18
Municipal bonds are:
Issued by corporations to expand thier business
Are highly speculative (high risk)
Issued by the Federal Government to raise funds for entitilement programs
Issued by local governments to raise money for roads, bridges, etc.
19
Which stock market has no physical location and trades are done via computer networks?
NYSE
AMEX
NASDAQ
20
What are municipal bonds?
Unsafe bonds that governments avoid
Unsafe bonds that consumers avoid
Bonds issued by state and local governments
Bonds issued by consumers
21
What is a stock dividend?
A capital gain
The price for which the stock is sold to investment bankers
Part of a company's profit that is paid to owners
The price for which the stock is sold in stock markets
22
My investment portfolio should . . .
liquidate my assets.
reflect brand names of product sectors
be diversified.
show healthy risk.
23
What is liquidity?
The ability to turn your money into cash or spendable funds
The flow of assets
The ability to "wash" your money so its untraceable
The wetness of the money in your pocket
24
Which of the following would be a good source to find Bond ratings?
Dow Jones
Moody's
S&P 500
All of the above
25
Generally speaking, what does the term "asset allocation" in an investment account mean?
Who your account goes to when you die.
Whether you put your investments in a TFSA or RRSP or taxable account.
The proportion of stocks and bonds or other assets in a portfolio.
How often you contribute to the account.
26
What is the relationship between the expected rate of return and the investment risk?
There is no relation ship between risk and rate of return
Greater the risk, the lower the expected rate of return
Lower the risk, the greater the expected rate of return
Greater the risk, the greater the expected rate of return
27
Which is the oldest stock market?
NASDAQ
AMEX
NYSE
28
Standard and Poor and Moodys issue ratings to indicate the bond's
coupon rate
return
risk
29
A bond's interest rate is called its
face value
principal
par value
coupon rate
30
Why is diversification a good investment strategy?
offsets the effects of inflation on investments
reduces risks to investors
guarantees a fixed rate of return on investments
Increases investors' access to money
31
You are looking for an investment that combines stocks and bonds, you would likely choose....
Mutual Funds
Corporate Bonds
Government Bonds
Real Estate
32
What is a mutual fund?
A pool of money used to buy a variety of stocks and bonds
A group of investors used to buy equity in various companies
An angel investor who pools money to invest in a start-up
A single investor who buy a variety of stocks and bonds
33
Which of the following mortgage bond ratings could produce the greatest yield for an investor?
AAA
B
A
BBB
34
Which stock market is considered "home of the tech stock"?
NYSE
AMEX
NASDAQ
35
A company with a stock market cap of less than $1 bill. These stocks tend to grow faster but can be a riskier investment
Mid Cap
Large cap
Dividend
Small Cap
36
People buy stocks because?
they are guaranteed interest payments each year
they expect to earn a profit
the government encourages them to buy stock
there is no chance of a loss

Stocks, Bonds, and Mutual Funds Flashcards | StudBud