Investing Flashcards

1
Q

An investment which represents ownership in a company

A

Stock

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2
Q

A lower risk way to invest in the stock market - a collection of several different types of stocks

A

Mutual Fund

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3
Q

An investment where you loan your money to a bank or a government and they pay you back later with interest.

A

Bond

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4
Q

What type of fund acts like a mutual fund but is traded like a stock?

A

ETF (Exchange Traded Fund)

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5
Q

What type of fund tracks the S&P 500 and tries to match its performance?

A

Index Fund

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6
Q

True/False: The S&P 500 is an index (list) of 500 of the largest US companies

A

True

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7
Q

True/False: A passively managed fund has high fees.

A

False. Actively managed funds have high fees, because they have fund managers making the investment decisions.

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8
Q

True/False: An index fund is usually passively managed, so has lower fees.

A

True

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9
Q

**

When you own stock in a company and the company makes money, they might pay you a:

A

Dividend. These are either given to you in cash or in the form of more stock.

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10
Q

True/False: Investing is more risky than saving, but can make you more money.

A

True.

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11
Q

True/False: Speculating is lower risk than investing

A

False. Speculating is usually short term and/or high risk (examples are crypto and collectibles)

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12
Q

An alternative investment where you buy gold, jewelry or coins and hope the value goes up over time

A

Commodities

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13
Q

In order to invest in the stock market, you must open this type of account:

A

Brokerage

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