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Stocks, Bonds,and Mutual Funds Flashcards | StudBud
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Stocks, Bonds,and Mutual Funds
Stocks, Bonds,and Mutual Funds
20 terms
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StudBud Administration
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8,175 plays
Basic Investing questions
Flashcards
20 cards
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Practice quiz
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Questions
20
Answers
1
The more risk you are willing to take, the more you stand to gain or lose.
False
True
2
What is a stock?
Above average return
Money received from a company
Part of a company's profit
Ownership in a company
3
A 12b-1 fee is a:
Fee to pay for the funds brokerage commission
Sales commission
Fee to pay for fund advertising
Management fee
4
An investment is:
The uncertainty that you will receive a return
A summary of a corporation’s financial results
Borrowing money to invest in a risky stock
The use of savings to earn a financial return
5
One way people can earn money from stocks is by:
Selling the stock for a higher price than they paid for it
Selling the stock for the same price
Selling the stock for a lower price than they paid for it
Buying stocks from an investment banker
6
Why do people buy stock?
They expect to earn a return
The government makes them
Because there is no chance of loss
They expect interest payments
7
Bonds are usually considered low risk, low return investments.
False
True
8
Liquidity is the ability to turn your investment into cash quickly.
True
False
9
What is a stock dividend?
The price paid for a stock
a number you can divide by
Part of a company's profit
A capital gain
10
Investing is the spreading of risk among many types of investments.
False
True
11
You will always earn a positive return from an investment.
True
False
12
A bull market means that the stock market is doing well.
True
False
13
Bonds are debt obligations of corporations or governments.
True
False
14
A portfolio is a person’s collection of investments.
True
False
15
What is a bond?
A certificate of deposit
Ownership with the right to a percentage of earnings
A loan from an investor to a corporation or government
A group of stocks sold together for a set price
16
Which of the following statements about mutual funds is true?
A 12b-1 fee is an acceptable fee for a mutual fund
Spreads the risk among several different stocks
All mutual funds are the same
Many mutual funds do not charge management fees.
17
When people buy stock on a stock market,
The corporation loses money
The corporation promises to pay them a return
the person selling the stock receives money
The person buying the stock receives money
18
Risk is the uncertainty that you will receive the promised return.
True
False
19
Why do companies issue stock?
It increases their portfolio
They want to raise money for capital
They like having shareholders
Because it makes them feel important
20
Stock is a unit of ownership in a company.
True
False
