Why would you use the Rule of 72?

Determine how long it takes to double your money

Which will earn you the most interest (assuming the same interest rate?

Compound interest paid quarterly

Investments that offer diversification

Company you own stock in goes out of business. You will

Loss all or part of your investment

Why do you want a diversified portfolio?

To decrease your risk by spreading out your options

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WHS Investing Unit 2017-2018

26 termsStudBud Administration364 plays

Preparation for Investing Unit test

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Questions 26

Answers

1
You sell your stock for $2000 more than you paid for it. You have a
Diversified Portfolio
Capital Loss
Capital Gain
Mutual Fund
2
Why would you use the Rule of 72?
Determine how long it takes to double your money
Determine your tax amount
Determine where to invest your money
Determine which stock will make money
3
You collect autographs hoping to make money in the future. However, later on no one wants them
Collectibles are only good for short periods
Collectibles will always make you money
Collectibles cannot be traded as investments
Collectibles can be risky
4
An investment that quickly and easily converts to cash is said to be
Risky
Compounded
Diversified
Liquid
5
Corporation borrows money from an investor and pays it back plus interest
Bond
Penny Stock
Mutual Fund
Dividend
6
First time a company makes it stock available to the public
Individual Portfolio Offering
Initial Portfolio Only
Initial Public Offering
Interested Parties Only
7
Optimistic, Upward, Feeling Good - Descriptions of a
Penny Stock
Capital Gain
Bear Market
Bull Market
8
You don't want to invest, worried about your investments, scared for the economy
Portfolio
Bull Market
Diversification
Bear Market
9
You buy and sell stock through a stockbroker. You will
Pay a transaction fee
Have to do a stock split
Have to report it to the SEC
Pay a front and back load fee
10
Stock Exchanges
AARP & SEC
NYSE & NAMEW
AARP & NYSE
NASDAQ & NYSE
11
What determines the price of stocks on the market?
The NASDAQ
The NYSE
The SEC
Supply and Demand
12
Well established companies paying good dividends
Mutual Funds
Penny Stocks
Mutual Market
Blue Chips
13
You have $1000 and you earn 4%. How long will it take to double it
4 years
18 years
16 years
8 years
14
Stock split announced at 2 for 1. You bought 10 shares originally at $2.00 per share. Now:
10 shares at $4.00
20 shares at $1.00
20 shares at $4.00
10 shares at $1.00
15
Company you have stock in sends you a check every quarter, but you didn't sell the stock.
Capital Gain
Mutual Fund
Dividend
Capital Loss
16
Which will earn you the most interest (assuming the same interest rate?
Compound interest paid quarterly
Simple interest paid once a year
Diversified interest
Simple interest paid twice a year
17
You have a very low tolerance for risk. You should consider
Investing in bonds
Investing in mutual funds
Investing in penny stocks
Investing in the stock market
18
Dividend announced at 50 cents per share. You own 100 shares . Your dividend is
$200
$100
$50
$5000
19
Mutual funds are
Only open to your mutual friends
Investments that offer diversification
Managed by yourself only
Funds without any risk
20
Which of the following pays a dividend?
Savings Account
Certificate of Deposit
Money Market Fund
Common Stock
21
Company you own stock in goes out of business. You will
Have a stock split
Diversify your stock with them
Loss all or part of your investment
Make a huge gain
22
Interest on interest
Value stocks
Risk management
Diversification
Compound interest
23
Bought stock at $10.00/share. Sell it at $12.00/share. You have a
Capital Loss
Capital Gain
Mutual Fund
Penny Stock
24
Why do you want a diversified portfolio?
To decrease your risk by spreading out your options
To make a lot of money quickly
To increase your risk
To make a little bit of money over the long run
25
You can redeem a bond for face value
Whenever you want to without penalty
Only when you make the interest payment
On the maturity date
After it makes money
26
Which statement is true about investing
You will never make money if you leave it in for a long time
You can make double your money if you diversify
You will always make money if you wait a while
You may or may not make money

WHS Investing Unit 2017-2018 Flashcards | StudBud