Semester 1 Final Flashcards
(36 cards)
Safe investments contain…
Government Bond, Savings accounts, Certified deposits, Certain corporate bonds
Which of the following would be considered speculative investments?
Precious metals
Which approach should someone take who is new to investing?
Investments with less risk
When choosing a investment you should consider risk. The four components of risk are…
inflation, interest rate, business fraud, and market
Which of the following risks deals with the possibility that bad management, unsuccessful products, or other factors will cause the business to be less profitable than originally anticipated?
Business failure risk
Which of the following risks associated with preferred stocks or government or corporate bonds is a result of changes in rates in the economy?
Interest rate risk
What risk reduces your purchasing power?
Inflation
Market risk is associated with fluctuations in the market due to:
Economic conditions such as rapid expansion and recession
What describes a growth company?
profits are reinvested in the company for future growth
The process of spreading your assets among multiple types of investments to lesson risk is called:
Risk allocation
What investment typically has the most risk?
Stocks
Which type of investment has returned an average of 10 percent per year over the past 100 years?
Stocks
If you need access to your funds in two years or less, which type of investment would you not choose?
Stocks and mutual funds
Generally, payments on corporate bonds are paid every:
Six months
Why do investors purchase corporate bonds?
To earn interest income, for the repayment of maturity, for the potential increase in value
if overall interest rates rise, a corporate bond with a fixed income with most likely:
decrease in value
if your monthly expenses total $2,000 total, you should save at least ____________ in an emergency fund before focusing on your investment plan?
$6,000
To survive a crisis, what steps should you take?
Establish a larger than usual emergency fund, know what you owe and reduce your spending, notify your lenders if you are unable to make payments, monitor the value of your investment and retirement funds
A distribution of money, stocks, or other property that is paid to stockholders of a company is called:
Dividends
A stock issued by a stable corporation that generally attracts conservative investors in called:
Blue chip stock
What type of account is based on historical numbers
both earnings per share and price earning ratio
NYSE stands for:
New York Stock Exchange
Mary Sue owns 1,000 shares of QRS Moving Company. QRS pays a yearly dividend of $1.00 per share. What is the total annual dividend that Mary Sue will receive?
$1,000
What is a major reason that investor purchase mutual funds
Diversification and professional management