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Stocks & The Stock Market Flashcards | StudBud
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Stocks & The Stock Market
Stocks & The Stock Market
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Answers
1
A diversified portfolio is desirable because
It's a good predictor on rate of return
It limits investment choices
It increases risk and return
It decreases risk
2
Which is NOT a stock market index?
S&P 500
Dow Jones Industrial Average
Nasdaq
New York Stock Index
3
Which is true about Initial Public Offerings (IPOs)?
The value of an IPO can be difficult to measure
All companies file an IPO
When IPO occurs, a company raises money to grow the business
IPOs occur when a private company becomes publicly traded
4
True/False: Investing your money in the stock market is lower risk than investing in a bank account
False
True
5
Which would be considered the highest risk investment type?
Bond
Money Market Account
Mutual Fund
Stock
6
True/False: Dividends are always paid daily
True
False
7
How can you make money investing in stocks?
Interest
Holding the stock at least 3 years
Dividends
A capital gain
8
When looking at a stock market resource,how can you tell if a company's stock price is increasing over a period of time?
The amount is black
The amount is green
There is no way to tell!
The amount is red
9
True/False: Generally, IPOs are considered a risky investment
True
False
10
You just bought 5 shares of stock that were $10 each. What did your total investment cost?
$50
$10
$100
$5
11
For a person who is closer to retirement and has a large amount to invest, what type of investing style is best?
Conservative
Moderate
Aggressive
12
Which type of investing represents ownership in a company?
Saving
Treasury bonds
Stocks
Municipal Bonds
13
What is the S&P 500?
stock market index that guarantees 500 dollars
stock market index of common stock
stock market index that measures the prices of 500 large companies
stock market index for 30 large, public companies
14
Which type of stock has rights as a shareholder voter?
Preferred Stock
Common Stock
15
Andy bought an investment for $100 and sold it for $250. Does he have a capital a gain or loss? How much is it?
Gain + $200
Loss -200
Loss -150
Gain + 150
16
The relationship between risk and return can be stated as
Higher risk indicates lower return
Higher risk indicates higher return
No relationship exists between risk and return
Lower risk indicates higher return
17
True/False: Investing in a diversified portfolio of stocks guarantees you will not lose money.
True
False
18
The open price of a stock is the price at what time?
The lowest price of the day
When the market opens
When the market closes
Midday pricing
