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Economics Investing Review Flashcards | StudBud
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Economics Investing Review
Economics Investing Review
25 terms
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#Economics #Investing Basics
Flashcards
25 cards
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Practice quiz
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Questions
25
Answers
1
When is the best time to buy stocks?
during a bear market when prices are low
during a bear market when the prices are high
during a bull market when prices are low
in the middle of the market cycle
2
Volatility refers to:
how easily an investment can be converted to cash
the amount of risk an investment may have
sudden swings in the value of stocks
the regular rise and fall of the 10 year market cycle
3
When does an investor experience capital loss?
reinvesting dividends toward the purchase of more stock
selling stock at a lower price than it was purchased
selling bonds before they fully mature
by selling stock after it has split
4
A “bear” market is
a growing market
a time of rising stock prices
a time of high inflation
a sluggish market
5
NASDAQ, NYSE, and AMEX are:
high risk stocks
mutual funds
stock exchanges
corporations
6
When does a bond earn full interest?
whenever it is sold
at maturity date, which depends upon the type of bond
20 years after purchase, regardless of the type of bond
always 10 years after purchase
7
A stock split is most likely to occur when:
a company is losing money
stockholders demand higher dividends
the price of stock becomes too high
the stock market is doing poorly
8
The profit made when stock is sold:
dividends
capital gains
shares
capital loss
9
Which statement about investing is true?
Investing early can have a significant advantage
Bonds are generally a riskier investment than stocks.
It is wise to take more risks as retirement nears.
Investing in stocks will guarantee a profit.
10
Why is it wise to invest money?
to have a way to grow money for thefuture/retirement
it is all too risky, and is not wise to invest
you're guaranteed $ if you buy and sell stock quickly
you're guaranteed enough $ to retire on if you invest
11
Market capitalization is
the highest price paid for a share
the total dollar market value of all of a company’s stocks
the number of shares a company has
the 52-week range for a company’s stock
12
Loans investors make to corporations or government
dividends
liquidity
stocks
bonds
13
Why is diversification of investments a wise choice?
to only invest in conservative, low-risk investments early
to be able to make as much money as possible in a short time
to make up losses in one area with gains from another
to be able to sell quickly when the market drops
14
Ownership shares in a company are called:
dividends
return
bonds
stock
15
Which statement about mutual funds is NOT true?
Mutual funds diversify investments.
pool investor’s money together into avariety of investments.
Mutual funds guarantee a certain rate of return
usually contain investments with different degrees of risk
16
What type of bonds have a higher risk?
junk bonds
government bonds
government securities
corporate bonds
17
Which of the following are higher risk investments ?
new stocks or new companies
blue chip stocks
government bonds
growth stocks
18
An example of a blue chip stock is
a large, well-established US company
a foreign-owned company operating in the US
a new start-up firm
a high-risk company
19
An example of an investment with low liquidity
stock
checking account
cash savings
travelers checks
20
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
21
An example of an investment with high liquidity
savings account
stock
real estate
bonds
22
Where are we now in the market cycle?
stuck at the very bottom
heading into a bear market
heading out of a bull market
riding a slow bull market
23
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.
24
What you earn on stock while you own it is called:
capital gains
dividends
liquidity
capital loss
25
When investing for growth:
money is made quarterly while the stock is owned
stocks are bought and sold quickly
dividends are collected as income
buy for the market value growth sell later for capital gains
