When people buy stock on a stock market

the corporation receives money for capital investments

In order to reduce the chance of loss in the stock market people can

diversify their stock portfolio

when your money builds on the principal and interest

What is a stock dividend?

yearly or quarterly payment/share of stock to stockholders

ability to turn investment into cash

Stocks are different from bonds in that

stocks represent ownership while bonds represent loans

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

start early, buy and hold, and diversify

the abbreviation for stocks and mutual funds

fee to pay for fund advertising

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Personal Finance

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Questions 24

Answers

1
When people buy stock on a stock market
the corporation loses money
the people selling stock lose money
the people buying the stock receive money
the corporation receives money for capital investments
2
initial investment is 300 and the annual interest rate is 10% how much do I have at end of year
60
303
30
330
3
Which is not a place where I could buy or sell a stock
stock broker
floor of the stock market
a bank
internet provider like E-Trade
4
Which of the following is an example of investing?
buying a US Savings Bond
buying groceries for your family
saving spare change and using it to buy snacks
putting money into a piggy bank at home
5
Which would be considered the savings alternative with the lowest risk and the lowest reward
real estate
certificate of deposit
bonds
stocks
6
In order to reduce the chance of loss in the stock market people can
invest in up and coming businesses
diversify their stock portfolio
invest into several companies in the same industry
invest heavily in one company
7
What is compounding
when your money builds on the principal
when your money builds on the interest
when your money builds on the principal and interest
when you make money
8
50 in savings for 1 year at an interest rate of 10% earns how much interest in a year?
5
3
4
2
9
People buy stock because
they are guaranteed interest payments each year
there is no chance of loss
the government encourages them to buy stock
they expect to earn a return
10
What is a stock dividend?
the price for which the stock is sold in stock markets
yearly or quarterly payment/share of stock to stockholders
the price for which the stock is sold to investment bankers
a daily payment to a stockholder
11
Which is not one of the top three stock markets in the US
NYSE
ESPQ
NASDAQ
AMEX
12
Liquidity is
cash
turning rock into water
ability to turn investment into cash
how easy it would be to make an investment liquid
13
Stocks are different from bonds in that
stocks mature and bands do not
stocks represent ownership while bonds represent loans
stocks guarantee a certain rate of return and bonds do not
stocks have ratings while bonds do not
14
What are the three rules for building wealth over the long term?
trade early, trade often, trade confidently
seek liquidity, loans, and limits
short buy, short cover, and buy on the margin
start early, buy and hold, and diversify
15
Which of the following is the least risky investment?
stocks
US Treasury Bonds
corporate bonds
mutual funds
16
If a savvy investor were given 10,000 to invest and wanted to triple his money in 30 years
invest in a savings account
invest in CDs
invest in mutual funds
invest in savings bonds
17
What does a full-service broker do that a discount broker does not do?
makes transactions in the over the counter market
offers investment advice
make transactions in organized financial markets
charges a low commision
18
The investment with the greatest liquidity is
a certificate of deposit
a mutual fund share
a savings account
a bond
19
A stock symbol is
the abbreviation for stocks and mutual funds
the daily change in cost of stocks
the asterisk that indicates a high performing stock
the ratio for price divided by earnings
20
If a savvy investor were given 5,000 to invest and may need the money immediately, invest in
CDs
stocks
savings account
mutual funds
21
Using the rule of 72 at a compound interest rate of 10% how many years until double your money?
7.0
2.7
7.2
10
22
Which of the following is a stock exchange?
DJIA
AAA
IPO
NYSE
23
Which is NOT a type of bond?
mutual fund
government
municipal
corporation
24
A 12b-1 fee is a
fee to pay the fund's brokerage commission
sales commission
management fee
fee to pay for fund advertising

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