Chapter 10 Insurance And Brokerage

Question 0

Diversification

Answer 0

Refers to the distribution of assets in Portfolio among different types of securities and maturity dates instead of putting all your eggs in one basket

Question 1

Annuity

Answer 1

Is a series of payments often to a retired person of a set amount from the capital investment

Question 2

Mutual funds

Answer 2

Are investment companies that pull money from many savers who have small amounts to invest. With this money the mutual fund purchases stocks bonds government securities and short-term on the market investments

Question 3

Bond

Answer 3

Is a debt instrument issued for a period of more than one year with the purpose of raising capital through borrowing.

Question 4

Stock

Answer 4

Is the capital raised by a corporation to the Issuance of shares entitling holders to an ownership interest or equity in the corporation.

Question 5

Common stock

Answer 5

Entitles owners to regular dividend payments of money when they are declared.

Question 6

Preferred stock

Answer 6

Owners usually receive a limited but set dividend amount and have no voting rights but their claim to the corporations earnings and assets upon liquidation takes precedence over claims of common stock owners