Personal Finance Unit 4 – Flashcards

A company issues stock to raise money.

There are two kinds of stock, ordinary and preferred.

Common stock holders don't have the right to vote on company issues.

Investors should consider selling their stocks during a bull market.

The Rule of 72 describes how long an investment will take to double.

The NASDAQ is the largest stock market in the United States

Global events can have an effect on investments such as gold.

Compounded interest is worse for the investor because the principle decreases.

The stock market is based on the laws of supply and demand.

A company has the option to pay dividends or not.

Equity financing is a method of raising money by issuing stock.

Dividends can not be issued as cash payments.

The principal of an investment is the amount that was originally invested.

The right to company assets and earnings is not a benefit of owning stocks.

Collectibles are a low risk because everyone wants a Baseball Cards

Which investment would you purchase if you were hoping to earn dividends? -Real Estate -Collectibles -Stock -Gold

Which of the following only allows electronic trading -American Stock Exchange -NYSE -NASDAQ

When it comes to investing, what is the typical relationship between risk and return? - The greater the potential risk, the smaller the potential return - The greater the potential risk, the greater the potential return - There is no relationship between risk and return. - It depends on the investment mix in your portfolio.

How can investors receive compounding returns? - By selecting a savings account that has a higher interest rate - By investing their earnings back into their original investment - By transferring their earnings back into high-risk investment - By diversifying their investment portfolio

What level of risks are mutual funds considered? -high -medium -low

When the stock market is doing well, it is considered to be a -Bull -Bear

This is the dollar amount an investor will receive at the maturity date of a bond. -market rate -fave value -dividends -maturity

What is the primary reason to issue stock? - To help investors earn a higher rate of return - To raise money to grow the company - To distribute the risk of bankruptcy across more investors - To increase investors awareness of the company.

When you buy a _____, you are loaning money to an organization. -stock -bond -mutual fund -index fund

Which of the following is not a stock market in the United States? - DOW Jones -ASE -NYSE -NASDAQ

Which of these investments is considered to be the riskiest? -collectibles -bonds -real estate -gold

The consistent rise in the price of goods and services.

A distribution of a portion of a company's earnings

The amount of time it takes for a bond to reach its full value.

The dollar amount an investor will receive at the maturity date of the bond.

Type of stock ownership that allows shareholders one voting right per share of stock.

Type of stock ownership that has a higher claim on assets but may not have the same voting rights.

The total amount of a good or service that is available to consumers.

The consumers willingness and desire to pay a price for a particular good or service.

Place the different types of investments in order from Highest level of risk to Lowest level of risk.