Investing Test Review

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

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

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

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.

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

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

Examples of a marketplace for trading stock

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

Issued by new companies and companies whose sales are very unsteady

The DOW Jones industrial Average is

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

Dividends are always paid to shareholders of common stock.

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

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

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

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

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

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