1

Question 1

Asset

Answer 1

An asset is something that has economic value now, or might have value in the future

Question 2

Asset allocation

Answer 2

This investment strategy aims to balance risk and reward. It involves spreading your investments across different types of assets, including stocks bonds and cash.

Question 3

Bear market

Answer 3

A bear market is When stock prices decline by at least 20% for two months or more.

Question 4

Bull market

Answer 4

This happens when stock prices are on the rise or expected to rise at least 20% after falling by 20%.

Question 5

Bond

Answer 5

Bonds allow companies and governments to raise funds by borrowing from the public.

Question 6

Broker

Answer 6

This is a company or individual that buys and sells securities, such as stocks or bonds on behalf of its clients.

Question 7

Capital gains

Answer 7

Capital gains refers to the money an investor makes when they sell an investment for a higher price than they paid.

Question 8

Commodities

Answer 8

Commodities are raw materials or agricultural products. Metal, energy, livestock, and meats.

Question 9

Common stock

Answer 9

This is the type of stock issued to the majority of shareholders in a company. Common shareholders have voting rights, but if the company needed to liquidate assets, everyone is paid out before the common shareholders.

Question 10

Diversification

Answer 10

This is a technique investors used to reduce risk of losing money by spreading investments across a variety of industries and assets.

Question 11

Dividend

Answer 11

Dividends are payments that corporations make to shareholders based on the current shares they own.

Question 12

Dividend reinvestment plan

Answer 12

DRIP is a plan that allows investors to automatically reinvest any dividends they earn into more shares

Question 13

Earnings per share

Answer 13

EPS is a calculation used to estimate the profitability of a company.

Question 14

E.S.G. investment funds

Answer 14

Environmental, social, and governance funds. These funds invest in companies that prioritize sustainability ethical business practises and good corporate governance.

Question 15

Equity

Answer 15

Equity can be defined as the amount of money the owner of an asset would be paid after selling it and any debts associated with the asset were paid off

Question 16

Equity portfolio

Answer 16

An equity portfolio consists of all the stock market investments made by the investor.

Question 17

Shareholders equity

Answer 17

This refers to the amount of money that would be left for the owners, if a company used its assets to pay off its debt.

Question 18

Equity stake

Answer 18

Refers to the amount of ownership of a company owned by a person, organization or group of owners.

Question 19

Exchange traded funds

Answer 19

ETFs function like a combination of mutual funds and conventional stocks. They are pooled investment funds, or baskets of securities that may include stocks, bonds, commodities, or currencies.

Question 20

Futures

Answer 20

This is a financial contract that requires a buyer to purchase a specific asset and a seller to provide that assets at a specific time in the future. the product can be anything from oil to gold to US dollars to ETFs. 

Question 21

Hedge fund

Answer 21

This is a financial partnership between a fund manager and investor who pool their funds then use different often aggressive strategies to achieve higher returns.

Question 22

Index fund

Answer 22

Index fund is a type of mutual fund or ETF. This portfolio of securities is specifically chosen to match the make up of a market index, such as the S&P 500, etc.

Question 23

Initial public offering

Answer 23

IPO also known as a stock launch an IPO describes the companies transition from a private to a public corporation by offering shares to the public for the first time.

Question 24

MER

Answer 24

Management expense ratio. This calculation determines the cost of operating a fund, such as administrative expenses.

Question 25

Margin account

Answer 25

This is a type of account that allows you to borrow money to invest. When an investor purchases a stock in a margin account, they pay a part of the purchase price and borrow the rest from a broker.

Question 26

Market capitalization

Answer 26

Also, known as a market cap this is the total value of a companies shares. You can Calculate this, by multiplying the total number of outstanding shares by the current price of the companies stocks.

Question 27

Market order

Answer 27

Market orders are instructions from investors to their broker to buy or sell securities immediately.

Question 28

Market timing

Answer 28

This is an investment strategy that involves trying to predict the best time to buy or sell stocks in order to maximize profit.

Question 29

Mutual funds

Answer 29

Mutual funds is a professionally managed fund that pools money from multiple investors invested in a variety of securities, including stocks and bonds.

Question 30

NASDAQ Composite

Answer 30

This is a stock market index that includes all stocks listed on the NASDAQ stock exchange. Should not be confused with the NASDAQ 100.

Question 31

Non-registered investment

Answer 31

When investments in this type of account earn income, it’s considered taxable, which is why these accounts are sometimes referred to as “taxable” or “open” accounts.

Question 32

Portfolio

Answer 32

Sometimes called an investment portfolio. This term refers to all of someone’s investment in stocks, bonds, commodities, cash and other assets.

Question 33

Preferred stock

Answer 33

This is the type of stock issued to a companies shareholders. preferred shareholders receive dividend payments before common shareholders.

Question 34

Price to earnings ratio

Answer 34

P/E this method determines a companies value by comparing its stock price to its actual earnings per share.

Question 35

Price Discovery

Answer 35

Price Discovery refers to the act of determining a common price for an asset. It occurs every time a seller and buyer interact in a regulated exchange.

Question 36

What happens during price discovery?

Answer 36

At its core, price discovery involves finding where supply and demand meet. In economics, the supply curve and the demand curve intersect at a single price, which then allows a transaction to occur.

Question 37

Shares

Answer 37

Shares represent equity ownership in a corporation or financial asset

Question 38

What is the calculation for EPS

Answer 38

It’s the net profit divided by the number of common shares owned by its share holders.

Question 39

What is net profit?

Answer 39

Net income indicates a company’s profit after all its expenses have been deducted from revenues.

Question 40

What is gross profit?

Answer 40

Gross profit refers to a company’s profits after subtracting the costs of producing and distributing its products.