Important Terms Ch 1

Question 1

What is a 52-Week High?

Answer 1

The highest point a security has traded at during the past year.

Based on the security’s price at the close of the trading day

Question 2

What is a 52-Week Low?

Answer 2

The lowest point a security has traded at during the past year

Question 3

What does a 401k plan allow an investor to do?

Answer 3

To make tax-deferred contributions to an investment account then the funds can provide a taxable income during retirement

Question 4

When you divide your assets across different stocks, bonds, funds etc

Answer 4

What is asset allocation

Question 5

What does APR stand for?

Answer 5

Annual Percentage Rate

Question 6

What is APR?

Answer 6

The price you’ll pay to borrow money from a bank or lender

Question 7

What does APY stand for?

Answer 7

Annual Percentage Yield

Question 8

What is APY?

Answer 8

The amount of money (compound interest) you can earn on your money

Question 9

What generally describes a bear market?

Answer 9

Drop of 20% or more

Question 10

A company that has been around for a long period and have shown they can bounce back from economic downturns

Answer 10

Blue chip stock

Question 11

This is considered a safe investment and is an important part of a diversified investment portfolio

Answer 11

Cash

Question 12

Money that’s stored in either bank accounts or short-term investments

Answer 12

Cash

Question 13

Capital Gains are subject to what?

Answer 13

Taxes

Question 14

Capital losses can do what?

Answer 14

Reduce tax burden

Question 15

A digital asset created using blockchain technology?

Answer 15

Cryptocurrency

Question 16

The process of spreading the funds in your investment portfolio across many different assets.

Answer 16

Diversification

Question 17

What is it called when a company shares profits to the investors?

Answer 17

Dividends

Question 18

What is a dividend aristocrat?

Answer 18

Companies in the S&P 500 that have increased their dividends over 25 consecutive years

Question 19

What is a dividend king?

Answer 19

Companies in the S&P 500 that have increased their dividends over 50 consecutive years

Question 20

What does EBITA stand for?

Answer 20

Earnings
Before
Interest
Taxes
Amortisation

Question 21

A fungible and tradable financial instrument used to raise capital in public and private markets.

Answer 21

Security