Intro to Investing
The Rule of 72 is used to estimate what?
The number of years required to double your money at a given rate of return
This type of low risk investment is also known as a fixed income investment
bonds
What is an example of a medium risk investment that we studied in this unit?
stocks, mutual funds, bonds, EFT, real estate, annuity
The high risk investment that uses a small amount of capital from many people to finance a new business or venture is called
crowdfunding
What does it mean to be risk averse?
Someone is more leery of investing--likes safer investments
Typically how many times per year do bondholders receive interest?
2
an example of a stock like Pepsico--which has a history of paying dividends is known as what income of stock?
income stock
types of digital currency that are a speculative type of investment
cryptocurrency
What might be an example of a diverse portfolio?
Different types of investments-stock, bonds, mutual funds
Why are government bonds safer than corporate bonds?
Backed by U.S. government
A stock like Royal Caribean that does well when the economy is good and poorly when the economy is bad is known as a
cyclical stock
corn, wheat, soybeans
What might be an example of a diverse portfolio?
Different types of investments-stock, bonds, mutual funds
Why might a company issue bonds?
pay off debt, start a new project, etc.
The term for purchasing stock and keeping it for a period of time is called
buy and hold
Why is collecting as an investment high risk?
may not hold its value==need to find someone who wants to buy it
What is an example of a speculative investment?
futures, options, NFT's, crowdfunding, cryptocurrency
When interest rate go up what happens to the value of bonds
go down
buying an equal dollar amount of a stock at regular intervals so you don't have to worry about timing your stock purchases
dollar cost averaging
What does NFT stand for?
Non-fungible token