Investing Test Review

Which risk component is most likely at fault when an investor's stock becomes worthless?

Profit from the sale of assets such as stocks, bonds, or real estate

Which of the following is an example of a speculative (or high risk) investment?

Conservative ( those who avoid risk) investors are attracted to small-cap stocks.

Retained earnings are profits a company reinvests for expansion or research and development.

The stock markets and the largest financial advisers are monitored by the _____.

Stock in companies that pay higher-than-average dividends are called income stock.

What is the purpose of a stock market index, like DOW Jones Industrial Average or S&P 500 Index?

It shares are owned by a relatively small group of people and are not traded openly in stock markets.

A corporation pays these to it's stockholders when they're profitable

The DOW Jones industrial Average is

Sells its shares openly in stock markets where anyone can buy them

Examples of a marketplace for trading stock

Dividends are always paid to shareholders of common stock.

The ability to buy or sell an investment quickly without substantially affecting its value

What would you recommend of these investments if someone is looking for the lowest risk possible?

A bear market is a market condition that occurs when investors are pessimistic about the economy and sell stocks.

A marketplace where brokers meet to buy and sell stock is called____.

Issued by new companies and companies whose sales are very unsteady