Investing
Anyone!
When a company lists its stock on an exchange, it means investors can buy its stock. How does this benefit the company?
The company takes that money used to buy the stock as capital to further build their business.
Julia buys a share of stock through her brokerage firm. What are the two ways that Julia could make money from owning this stock?
Your friend asks to borrow $50 and offers to pay you back with interest. What factors would you consider in your decision to accept or decline their request?
Which choice best describes a trader:
a. a trader generally buys stock and sells stock within a specific time frame in hopes to make the most amount of money
b. a trader generally buys stock and sells stock at any random point knowing there is potential for maximal risk
c. someone who exchanges baseball cards
a. a trader generally buys stock and sells stock within a specific time frame in hopes to make the most amount of money
What are the two ways that investors can make money from stocks?
2. From the interest rate that their investment collects from over time
We know that investing in just one company is risky since there’s a chance that the stock’s value could decrease. What are some ways that we can minimize her risk?
What is a bond?
a) when 2 different stocks combine
b) when an investor and a trader become friendly with one another
c) a loan given by an investor to a company or the government who receives interest in return
d) Jame's last name
c) a loan given by an investor to a company or the government who receives interest in return
Which choice best describes a investor:
a. a trader generally buys stock and sells stock within a specific time frame in hopes to make the most amount of money
b. a trader generally buys stock and sells stock at any random point knowing there is potential for maximal risk
c. someone who exchanges baseball cards
b. an investor generally buys stock and sells stock at any random point knowing there is potential for maximal risk
As an investor, what are the risks involved with buying one company’s stock?
The company could decline plummet or go bankrupt, or go out of business, which means you as the investor would lose that money used to buy the stock.
Which of the following is a good analogy for a stock split?
Getting a pay bonus at your job
Buying something on sale
Paying a premium for something you want
Exchanging large currency bills for smaller bills
4. Exchanging large currency bills for smaller bills
All of the following are true about bonds EXCEPT…
Bonds are considered a riskier investment option than stocks.
A bond is a loan given to a company or government by an investor who receives interest in return.
Companies and governments issue bonds to fund new projects or ongoing expenses.
Bonds are a way for investors to diversify their portfolios and generate additional income.
1. Bonds are considered a riskier investment option than stocks.
What do we mean when we talk about having a diversified portfolio:
a. a lot of colors in our writing samples
b. a lot of money in our investments in one company
c. different sums of stock bought from various different companies across the board with varying levels of potential risks
d. building our own company with diverse employees
c. different sums of stock bought from various different companies across the board with varying levels of potential risks
Jamie asks, “What are the latest trends in the stock market?” In other words, Jamie is asking…
Which companies used to be listed on a particular stock market index?
How has the stock market performed over the past 10 years?
How many companies are listed on the stock exchange?
What are the upward and downward patterns of the stock market over a recent period of time?
4. What are the upward and downward patterns of the stock market over a recent period of time?
True or False? A stock split changes the overall value of a company.
True
False
2. False
What is default risk?
The risk that the investor is not able to pay the face value of the bond.
The risk that the company or government is not able to make interest payments.
The risk that the investor demands the face value of the bond before the bond fully matures.
The risk that the company or government is unable to pay back the investor.
2. The risk that the company or government is not able to make interest payments.
When it comes to compound interest, imagine you had $1,000 set aside. Which of the following scenarios do you think will have lead to gaining more money in the long run:
Scenario 1: You invest the $1,000 with compound interest, interest rate of 7%, at age 20 and let it sit there for 10 years. You do not touch it and you do not add any money to it.
Scenario 2:
You invest the $1,000 with compound interest, also with an interest rate of 7%, at age 30 and let it sit there for 30 years. You also do not touch it and you do not add any money to it.
Scenario 1: You invest the $1,000 with compound interest, interest rate of 7%, at age 20 and let it sit there for 10 years. You do not touch it and you do not add any money to it.
Explanation: when compound interest, it is not about how long the money is set aside so much as it is about how early on in your life you put aside that money. The earlier in your life you set aside that money, the greater that money will grow in a faster amount of time.
What is the difference between a BULL and a BEAR market?
A BULL market is when the stock market is rising and the economy is booming, while a BEAR market describes a declining market and a receding economy
A BULL market is when there is a decline in the stock market and the economy is receding, while a BEAR market describes a rising market and a booming economy.
1. A BULL market is when the stock market is rising and the economy is booming, while a BEAR market describes a declining market and a receding economy
In terms of investing in stocks, we talked about dividends. What is a dividend when it comes to investing a company's stock?
The money you as the investor earn after you sell the stock and the company is making profits, some of that money (the dividend) goes to you as the investor.
You've decided you want to sell a bond before its maturity date. Interest rates are currently higher than when you bought the bond. What will you likely have to do to make your bond more appealing to investors?
Lower the interest rate
Sell your bond at a discounted price
Increase the interest rate
Sell your bond at a higher price
2. Sell your bond at a discounted price