Why do people usually invest in mutual funds?

BECAUSE THEY WANT AN EASY WAY TO MAKE A DIVERSE INVESTMENT

A PLACE WHERE BUYERS AND SELLERS MEET TO EXCHANGE GOODS

What is a Time Horizon?

HOW LONG YOU PLAN ON INVESTING TO REACH A CERTAIN GOAL

What does a stock represent?

A PIECE OF OWNERSHIP OF THE COMPANY

Why would a business prefer to sell bonds to investors instead of stocks to raise money?

SELLING STOCKS LOSES PERMANENT OWNERSHIP OF THE BUSINESS, WHILE BONDS DO NO

Where do most stock trades happen today?Selected Answer: By computerCorrect Answer: By computer

TO HELP INVESTORS UNDERSTAND HOW THE MARKET AS A WHOLE IS MOVING

If you buy a bond from a company, what do they owe you in return?

TO PAY BACK THE AMOUNT OF THE BOND, PLUS INTEREST

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Elementary and Middle School Lessons

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Questions 18

Answers

1
Where do most stock trades happen today?
AT THE FLEA MARKET
DIRECTLY WITH OTHER TRADERS AT OPEN MARKETS
BY COMPUTER
ON THE FLOOR OF THE NASDAQ STOCK EXCHANGE
2
Why do people usually invest in mutual funds?
BECAUSE THEY WANT TO INVEST IN A SPECIFIC COMPANY
BECAUSE THEY WANT AN EASY WAY TO MAKE A DIVERSE INVESTMENT
BECAUSE THEY WANT TO BUILD THEIR OWN COMPANY
BECAUSE THEY ARE AN ACTIVE TRADER WHO WANTS TO DAY-TRADE
3
What is the major focus of the NASDAQ index?
ENERGY COMPANIES
TECHNOLOGY COMPANIES
HEALTHCARE COMPANIES
SMALLER COMPANIES
4
What is a Market?
A PLACE THAT SELLS FRUITS AND VEGETABLES
ONLY A PLACE WHERE STOCKS AND BONDS ARE TRADED
A BIG STORE WITH LOTS OF CUSTOMERS
A PLACE WHERE BUYERS AND SELLERS MEET TO EXCHANGE GOODS
5
What is a Time Horizon?
THE EDGE OF A BLACK HOLE
HOW LONG YOU PLAN ON INVESTING TO REACH A CERTAIN GOAL
HOW LONG YOU PLAN ON USING A BUDGET
HOW LONG YOU PLAN ON INVESTING OVER YOUR LIFETIME
6
If the prevailing market interest rates go up, what happens to bond prices?
THEY USUALLY GO UP
THEY USUALLY GO DOWN
THEY USUALLY STAY THE SAME
THEY ARE VERY HARD TO PREDICT
7
Why do companies issue stock?
TO INCREASE PROFITS FROM THE MONEY THEY GET BY SELLING THE STOCK
BECAUSE COMPANIES WITH STOCK ALWAYS DO BETTER IN THE MARKET
BECAUSE THEY ARE FORCED TO IN ORDER TO OPEN A BUSINESS
TO RAISE MONEY FOR GROWTH
8
What does a stock represent?
AN OBLIGATION FOR THAT COMPANY TO PAY YOU MONEY IN THE FUTURE
WHATEVER THE DOLLAR AMOUNT IS WRITTEN ON THE STOCK
A PIECE OF OWNERSHIP OF THE COMPANY
NOTHING ON ITS OWN - STOCKS ONLY HAVE VALUE IF INVESTORS SAY THEY HAVE VALU
9
What is NOT true when a company issues stock?
THE COMPANY'S OWNERSHIP IS DIVIDED BETWEEN THE STOCKHOLDERS
THE COMPANY MUST NOW GET PERMISSION FROM ITS STOCKHOLDERS BEFORE MAKING BIG
THE COMPANY GOES INTO DEBT
THE COMPANY OWES A SHARE OF ITS PROFITS TO ITS SHAREHOLDERS
10
What do investors call the stocks, bonds, and cash that make up a mutual fund?
MUTUAL FUND SHARES
ASSETS UNDER MANAGEMENT FEE
NET PRESENT VALUE
ASSETS UNDER MANAGEMENT
11
How are most mutual funds traded?
ONE INVESTOR TO ANOTHER
ON A STOCK EXCHANGE
THE FUND MANAGER SELLING NEW SHARES TO NEW INVESTORS
MUTUAL FUNDS ARE RARELY TRADED
12
Why would a business prefer to sell bonds to investors instead of stocks to raise money?
BUSINESSES ONLY ISSUE BONDS IF THEY CANNOT ISSUE STOCK
SELLING STOCKS LOSES PERMANENT OWNERSHIP OF THE BUSINESS, WHILE BONDS DO NO
BECAUSE SELLING BONDS GIVES INVESTORS MORE OF A SAY IN HOW THE BUSINESS IS
BECAUSE BONDS DO NOT NEED TO BE PAID BACK, SO IT IS A MORE EFFECTIVE WAY TO
13
How many stocks are in the Dow Jones Industrial Average?
30
3000
100
500
14
What determines the price of a stock in the market?
THE ASKING PRICE OF THE SELLER ONTHE ASKING PRICE OF THE SELLER ONLYLY
PRICES ARE SET BY THE EXCHANGE EVERY DAY
SUPPLY AND DEMAND
THE QUANTITY AVAILABLE TO BUY
15
Where do most stock trades happen today?Selected Answer: By computerCorrect Answer: By computer
TO HELP INVESTORS UNDERSTAND HOW THE MARKET AS A WHOLE IS MOVING
TO HELP FUND MANAGERS BUILD THEIR FUNDS
TO HELP RAISE STOCK PRICES FOR UNDERVALUED COMPANIES
TO HELP INVESTORS PICK SPECIFIC STOCKS
16
If you buy a bond from a company, what do they owe you in return?
TO PAY BACK THE AMOUNT OF THE BOND, PLUS INTEREST
SOME OF THEIR PRODUCTS OR SERVICES
NOTHING, BONDS ARE A SCAM
A SHARE OF THEIR PROFITS
17
What is a Diversified portfolio?
A PORTFOLIO MADE OF STOCKS FROM DIFFERENT SECTORS
A PORTFOLIO MADE OF STOCKS FROM DIFFERENT LOCATIONS
ALL OF THE ABOVE
A PORTFOLIO MADE OF STOCKS FROM DIFFERENT INDUSTRIES
18
If you are a new investor, which approach is the safest way to start?
A DIVERSIFIED PORTFOLIO
STAYING OUT OF THE MARKET ENTIRELY
A PORTFOLIO WITH ONLY ONE STOCK
AN INDUSTRY-SPECIFIC PORTFOLIO

Elementary and Middle School Lessons Flashcards | StudBud