wom validation Flashcards
What are some different ways you can invest?
- Equities (stocks or shares)
- Bonds.
- Cash
Why do some people invest their money?
It enables you to grow your money and achieve your goals quickly without you having to work all your life.
What does ASX stand for?
Australian Securities Exchange
What does the ASX do?
ASX is an market that is for buying and selling shares. listings, trading, clearing,
What are the different sectors companies belong to on the ASX? Give an example of a company that belongs to each sector.
Energy: energy
Materials: materials
Industrials: Capital goods
Consumer Discretionary: consumer services
Consumer staples: food, beverage & tobacco
Healthcare: healthcare equipment and services
Financials: banks
Information Technology: software and services
Telecommunication services: telecommunication services
Utilities: utilities
Real estate: real estate
What is a marketplace?
A marketplace is a type of e-commerce platform where people exchange goods, services, or information.
What is a share?
A portion of a company expressing ownership of the company.
What is the capital gains tax?
Capital gains tax (CGT) is the tax you pay on profits from disposing of assets including investments, such as property, shares and crypto assets.
What are the differences between interest, capital gains, and dividends?
- capital gain= is the profit gained after selling an asset at a higher price than the original cost.
- dividend= reward or interest payment received by investors who hold shares in the company
- Interest= monetary charge for the privilege of borrowing money
Which companies on the ASX pay out dividends?
Woolworths
Coles
Rio Tinto
What are some ways someone can make capital gains?
selling an investment, such as stocks, bonds, or real estate.
What is risk (in terms of investing)?
Risk=uncertainty with ur investments that has the potential to negatively impact your financial welfare.
What is a return on investment (ROI)?
a performance measure used to:
- evaluate the efficiency/profitability of investment
What and who are shareholders?
A shareholder is a person, company, or institution that owns at least one share of a company’s stock or a share of a mutual fund.
What is a bond (fixed interest)?
where you agree to lend your money to a government or company at an agreed interest rate for a certain amount of time
What are international stocks (international equities)? What are some examples?
exchange of stocks/shares in international stock market exchanges located in many countries overseas. Eg. apple, ali baba
What is the general rule for risk vs. reward (in terms of return on investment)?
the greater the risk, the greater the expected return demanded.
What is money? What are some different forms of money?
Money has 3 attributes;
- It is widely accepted means of payment
- It has a unit of measure
-It has a value
The two forms are:
- coins and banknotes
- deposits held in accounts at banks
What is a commodity? What are some examples of commodities?
Commodities are basic goods and materials that are widely used. This includes barrels of oils, bushels of wheat, or megawatt-hours of electricity.
Is real estate/property a risky investment? Why/why not?
Key risks:
- bad locations
- negative cash flows
- high vacancies
- problematic tenants
- hidden structural problems,
- real estate’s lack of liquidity,
- unpredictable nature of the real estate market.
Rank the following asset classes in terms of risk: Cash, Property, Bonds, International Equities, Australian Equities (from least risky to most risk)
?
Why is it important to diversify your investments in the stockmarket?
Its important to diversify your investments in the market because it lowers your portfolio’s risk because different asset classes do well at different times. If one business or sector fails or performs badly, you won’t lose all your money.
What is cryptocurrency? How risky is it as a form of investment?
- digital tokens.
- They are a type of digital currency that allows people to make payments directly to each other through an online system.
- (Bitcoin) Crypto is a high-risk investment.
- very volatile,
- fluctuating large = short period.
What is the ASX classified as?
stock exchange
What does floating stocks mean?
- shares of a company’s stock that are available in the open market to the public
What factors can impact the value of a stock? Give some examples using your presentation
- demand for the product
- consumer sentiment
- price of commodities
- competition
What is inflation? How can it impact the economy?
Inflation is the persistent and appreciable rise in the monetary value of goods and services. Inflation impacts an economy through making it harder for consumers to afford products and unevenly rising prices.
What is an index?
measures the performance of a stock market or sector of stock market
What is the difference between a bull and bear market?
bull=on the rise
bear=recession/declining value
