Investing Flashcards
An investment which represents ownership in a company
Stock
A lower risk way to invest in the stock market - a collection of several different types of stocks
Mutual Fund
An investment where you loan your money to a bank or a government and they pay you back later with interest.
Bond
What type of fund acts like a mutual fund but is traded like a stock?
ETF (Exchange Traded Fund)
What type of fund tracks the S&P 500 and tries to match its performance?
Index Fund
True/False: The S&P 500 is an index (list) of 500 of the largest US companies
True
True/False: A passively managed fund has high fees.
False. Actively managed funds have high fees, because they have fund managers making the investment decisions.
True/False: An index fund is usually passively managed, so has lower fees.
True
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When you own stock in a company and the company makes money, they might pay you a:
Dividend. These are either given to you in cash or in the form of more stock.
True/False: Investing is more risky than saving, but can make you more money.
True.
True/False: Speculating is lower risk than investing
False. Speculating is usually short term and/or high risk (examples are crypto and collectibles)
An alternative investment where you buy gold, jewelry or coins and hope the value goes up over time
Commodities
In order to invest in the stock market, you must open this type of account:
Brokerage