Intro to Investing
Issued when a company goes public for the first time
IPO (Initial Public Offering)
Type of stock that has a history of stable earnings and usually pays some form of dividend
Blue Chip Stock
Is the Dow Jones or S and P 500 More Diversified?
S and P 500
True or False: Speculative investments are more risky investments
Name 2 examples of a speculative investment:
True
-Real Estate, Crypto, Future, Flipping homes, Rental Properties, etc.
Define Diversification:
The process of spreading risk across a variety of assets
Purchase of assets with the goal of increasing future income
Investing
Price Per share X shares Outstanding
Market Capitalization
The Dow Jones is an index that tracks how many companies?
30
Is your family home typically considered an investment? Why or why not?
No; you did not purchase the home with the goal of increasing future income.
Define Opportunity Cost
The loss of potential gain from other alternatives when one alternative is chosen.
A collection of all your investments
Portfolio
This indicates how many trades have been made so far today:
This indicates the shares traded in a typical day:
Volume; Average Volume
Which fees are higher? Mutual fund fees or index fund fees? Why?
Mutual Fund Fees; You are paying the mutual fund manager to curate the fund for you
What are 3 characteristics of a Roth IRA? 1 Characteristic of a 401(k)?
Roth IRA: Tax Sheltered, Can't take out growth until 59 and a half, $7000 max contribution, on earned income only, Self funded
401(K): Funded usually in part by your employer, may have a match, employer contributions may need to vest
When would you use technical analysis? What is it? When would you use fundamental analysis? What is it?
Technical: Using trends, news, other indicators to determine when to buy an investment - Short Term Investing
Fundamental: Looking at what a company is truly worth to determine whether to invest or not - Long Term Investing
The Nasdaq, NYSE, and Amex are all ___
Exchanges
If I wanted to see how much the stock price has reached in the last year, I would look at:
52 Week High / 52 Week Range
Rank these investments in order from least to most risky: Stocks, Bonds, Mutual / Index Funds, Real Estate
Bonds, Mutual / Index Funds, Stocks, Real Estate
What is the max contribution for an IRA 2025?
What is the max contribution for a 401(K)/ 403(B)?
IRA: $7,000
401(K)/403(B): $23,500
I invested $400 into SBUX. I made a dividend of $25. I sold my share at $250. What is my rate of return? Explain your work.
-125 / 400 = -31.25%
Money corporations receive from stockholders is known as
Equity Capital
This is done when a stock price gets too high _____
and this is done when a company wants to reduce the number of shares that exist _______
Does the amount of money you have invested in a company change in either situation?
Stock Split; Reverse stock split; No
Company 1 has a bond rating of AAA. Company 2 (Government) has a bond rating of BBB. Which would pay a higher interest rate? Which would provide tax exempt earnings?
Both Company 2
Company X has a 6% match as a fringe benefit. Describe what this means and how much you should contribute to your 401k, as a minimum and why.
6% minimum. Ms. T's Discretion on explanation.
Define both capital gain and unrealized gain:
Define Volatility:
Capital gain is when money is made on an investment. Unrealized gain is when an investment gains value, but the security is not sold.
Volatility: The range in price a stock or investment experiences over a given period of time