stud
bud
Sign up
Log in
Home
Library
Explore
SAT
More
Economics Investing Review Flashcards | StudBud
Explore
/
Economics Investing Review
Economics Investing Review
25 terms
·
StudBud Administration
·
181 plays
#Economics #Investing Basics
Flashcards
25 cards
F
Practice quiz
P
Host live
L
Questions
25
Answers
1
Which of the following are higher risk investments ?
government bonds
blue chip stocks
new stocks or new companies
growth stocks
2
When does a bond earn full interest?
always 10 years after purchase
whenever it is sold
20 years after purchase, regardless of the type of bond
at maturity date, which depends upon the type of bond
3
When investing for growth:
stocks are bought and sold quickly
dividends are collected as income
buy for the market value growth sell later for capital gains
money is made quarterly while the stock is owned
4
Which statement about life cycle funds is NOT true?
invest more conservatively early, andmore aggressively later
invest more aggressively early, andmore conservatively later
Life cycle funds are generally long-term investments.
Life cycle funds adjust over time.
5
Why is diversification of investments a wise choice?
to only invest in conservative, low-risk investments early
to make up losses in one area with gains from another
to be able to sell quickly when the market drops
to be able to make as much money as possible in a short time
6
Where are we now in the market cycle?
heading into a bear market
riding a slow bull market
stuck at the very bottom
heading out of a bull market
7
Market capitalization is
the number of shares a company has
the highest price paid for a share
the total dollar market value of all of a company’s stocks
the 52-week range for a company’s stock
8
Loans investors make to corporations or government
stocks
dividends
bonds
liquidity
9
An example of a blue chip stock is
a high-risk company
a new start-up firm
a large, well-established US company
a foreign-owned company operating in the US
10
What you earn on stock while you own it is called:
capital gains
dividends
capital loss
liquidity
11
Volatility refers to:
the regular rise and fall of the 10 year market cycle
the amount of risk an investment may have
how easily an investment can be converted to cash
sudden swings in the value of stocks
12
What type of bonds have a higher risk?
junk bonds
government bonds
corporate bonds
government securities
13
An example of an investment with high liquidity
stock
bonds
real estate
savings account
14
NASDAQ, NYSE, and AMEX are:
stock exchanges
mutual funds
high risk stocks
corporations
15
An example of an investment with low liquidity
travelers checks
stock
checking account
cash savings
16
When does an investor experience capital loss?
selling bonds before they fully mature
selling stock at a lower price than it was purchased
reinvesting dividends toward the purchase of more stock
by selling stock after it has split
17
A stock split is most likely to occur when:
the stock market is doing poorly
stockholders demand higher dividends
the price of stock becomes too high
a company is losing money
18
What is the relationship between risk and return?
the higher the risk, the lower the potential return
the lower the risk, the higher the potential return
there is no relationship between risk and return
the higher the risk, the higher the potential return
19
When is the best time to buy stocks?
during a bear market when prices are low
in the middle of the market cycle
during a bear market when the prices are high
during a bull market when prices are low
20
Ownership shares in a company are called:
bonds
dividends
return
stock
21
Which statement about investing is true?
It is wise to take more risks as retirement nears.
Investing early can have a significant advantage
Investing in stocks will guarantee a profit.
Bonds are generally a riskier investment than stocks.
22
Which statement about mutual funds is NOT true?
Mutual funds diversify investments.
pool investor’s money together into avariety of investments.
usually contain investments with different degrees of risk
Mutual funds guarantee a certain rate of return
23
A “bear” market is
a time of rising stock prices
a sluggish market
a growing market
a time of high inflation
24
The profit made when stock is sold:
dividends
shares
capital gains
capital loss
25
Why is it wise to invest money?
you're guaranteed $ if you buy and sell stock quickly
to have a way to grow money for thefuture/retirement
it is all too risky, and is not wise to invest
you're guaranteed enough $ to retire on if you invest
