Investment Basic Review Flashcards
What is a Mutual Funds?
Investment vehicle that pools money from many investors
True or False Market capitalization is the stock price multiplied by the number of outstanding shares of stock, or the total value of the company’s stock.
True: Stock price multiplied by the number of outstanding shares of a stock, of the total value of the company’s stock.
Match the following A) Cash B) Fixed income C) Equity
C) Stocks B) Bonds A) Money Market
True or False : Cash is a short term debt obligation of an organization and has high risk and return.
False
Which of the following are true regarding Bonds in comparison to equities?
Low risk / return
Match the following : STOCKS BONDS, CASH
Stock: Represents ownership in publicly traded companies
Bonds: Represents longer term debt of an organization
Cash: Represents a short-term debt obligation of an organization ( 1 year or less)
Which of the following are goals of asset allocation? Choose all that apply
A) An investment strategy that aims to balance risk and reward by allocating a portfolio’s assets among different investments.
B) Based on the principle that different assets classes preform differently in different market and economic conditions
C) Referred to as diversification
D) Objective is to reduce overall risk by investing in a variety of asset classes
E) All of the above is the answer
What does Diversification Mean ?
Investing in multiple asset classes and securities to reduce the investment risk.
Match the following
Balance Fund
Asset Allocation Fund
Target Date fund
Balance Fund: targets a moderate level of risk slightly tilted in the favor of Equities
Asset Allocation Fund : Targets a set of allocation that remains static. These funds are risk based.
Target Date fund: Targets an age appropriate investment Mix. The mix will change as the time to the target date shortens
When providing performance which of the following must you provide ?
As of date…
1 year 5 yrs 10 yrs or since inception
What statement must you always say when quoting performance?
As of (Date) (Fund Name) has preformed __ for 1yr __ for 5yr and _ 10 yr. Please note past performance does not guarantee future performance ( if necessary ) the performance since the funds inception is ___
True or False: Collective Trusts will have a ticker symbol
False: Collective trust have no ticker symbol.
Match the following: Dividends, Capital Gains
Dividends: are the portion of the company’s profits are paid out to its PPTS
Capital gains: are the profit from selling stock or bonds at a higher price than what was paid to purchase.
