Economics UNIT 2 Test Review

Which characteristic describes a disadvantage of a sole proprietorship?

When you purchase stock, you buy ownership of a company.

This is the initial document(s) developed prior to starting a new business.

What is an advantage of buying a home instead of renting an apartment?

Which of these is an accurate statement about the NASDAQ?

A mutual fund is the purchase of over a 50% stock share of one company.

The possibility that the rate of return on an investment doesn’t keep pace with the rate of increase in price level.

Is the company making any return on its products? Is the company making money?

One advantage of a sole proprietorship is that the company can sell stock to raise capital.

A ________________ is the owner of a rental property; a ________________ is someone renting a property to live in.

It takes three or more people to form a partnership.

Which of the following would be considered the savings alternative with the highest risk and the highest reward?

The chance that someone who borrows money may not pay it back.

Does the company have a strong leadership team?

Shareholders sometimes receive dividends from their investment when the company is making a profit.

If a stock gains value and is now worth more, it earned a capital loss.

Are there a lot of other companies doing what this company does or is it more a one-of-a-kind company?

A down payment for a house is generally how much of the total cost of the house?

You invest $50,000 in Nike stock. You decide to sell your shares for a total of $48, 700. What was the gain or loss?

What are the three rules for building wealth over the long term?

The portion of the profit that is paid to the stock owner is

When buying stocks, you must buy at least 10 shares of a company at a time.

Which of the following are the two ways stockholders receive a return on their investment?

Which of the following is NOT part of a business plan?

The NASDAQ stock market is considered to be the riskiest market for investments.

The possibility that the value of an asset goes down in value and becomes worth less than the price

The risk taken when an investor must sell an asset to realize any value gained.

A loan given to buy a home is called a

A higher rate of return on an investment means greater risk.

Are there other companies that make a better product?

Which of the following is the least risky investment?

What is the maximum amount James should pay a month for a new home?

Every publicly traded company uses a stock symbol in their financial market to identify itself.

Trying to “time the market” by frequent buying and selling violates which rule of long-term savings?

The money that an investor makes on an investment is called

What is the relationship between risk and reward?

Which describes an essential feature of corporations?

Does the company have a quality good or service they are producing or providing to the public?