stud
bud
Sign up
Log in
Home
Library
Explore
SAT
More
Investing Flashcards | StudBud
Explore
/
Investing
Investing
20 terms
·
StudBud Administration
·
5 plays
Imported from external platform
Flashcards
20 cards
F
Practice quiz
P
Host live
L
Questions
20
Answers
1
Which is NOT a stock market index?
Nasdaq
S&P 500
Dow Jones Industrial Average
New York Stock Exchange
2
How can you make money on stocks?
A capital gain
Holding the stock at least 3 years
Interest
Dividends
3
Why is it important to start investing as soon as possible?
You take less risk when you are young, so money will be safe
Fees on investments are cheaper when you are younger
You have more time for your money to compound
Investing is an easy way to make quick money
4
Your money remains tax-deferred in this account until you withdraw (taxed as income).
Traditional IRA
Roth IRA
5
A diversified portfolio is desirable because
It decreases risk
It limits investment choices
It's a good predictor on rate of return
It increases risk and return
6
Brokers who suggest specific investments, create an investment plan, & make adjustments are
Discount Brokers with Assistance
Full-Service Brokers
Money Managers
Discount/Online Brokers
7
Which is NOT one of the companies that rates bonds?
Fitch
Experian
S&P
Moody's
8
If interest rates rise, what will typically happen to bond prices?
Rise
Stay the same
Fall
9
The relationship between risk and return can be stated as
Lower risk indicates higher return
Higher risk indicates higher return
No relationship exists between risk and return
Higher risk indicates lower return
10
True/False: Investing in a diversified portfolio of stocks guarantees you will not lose money.
True
False
11
Which would be considered the highest risk investment type?
Money Market Account
Stock
Bond
Mutual Fund
12
Which of the following accurately describes asset allocation?
Well-balanced portfolio of different stock classifications
Dividing among different asset categories based on time
Chance your investment won't be worth as much in the future
Dividing among different asset categories based on risk
13
Which is NOT a good reason to buy a stock fund like the S&P 500?
Don't have to monitor as closely as active managed account
You want to "beat the market" with your ROI
Have an investment with low fees
Have a diversified portfolio
14
What is the primary difference between index funds (IF) & actively managed funds(AMF)?
AMF try to outperform their benchmark & peer group average
AMF typically carry higher costs (expense ratios)than IF
The goal of an IF is to earn a higher return than the market
IF try to track performance of a particular index
15
Andy earned $300 on a $1000 investment. What is his current ROI (return on investment)?
40%
3%
30%
2%
16
Putting regular amounts of money into an investment account at specific time intervals is
Compound interest
Dollar cost averaging
Inflation
Diversification
17
The face value of a bond is called...
Principal
Coupon
Par Value
Maturity Date
18
A key difference between saving and investing is
Investing has a guaranteed return, savings does not
Savings is for everyone, investing if for the wealthy
Your money is insured when investing, it is not in savings
Saving is emergencies & goals, investing is long-term wealth
19
Why is compound interest more beneficial than simple interest?
Your money grows faster when it is compounded
You earn interest on your interest
Compound interest is hard to calculate, so fewer use it
Fees for compound interest are greater than simple interest
20
Which is true about Initial Public Offerings (IPOs)?
All companies file an IPO
When IPO occurs, a company raises money to grow the business
The value of an IPO can be difficult to measure
IPOs occur when a private company becomes publicly traded
