Stocks
What is a stock?
A share of ownership of a publicly held company
What is a bond?
A debt security issued by a corporation or government that promises a fixed amount of interest
What is liquidity?
A measure of how quickly an asset can be turned into cash
True/False: Cryptocurrency and commodities are considered low risk investments
False
What is a stock split?
The issuance of more stock to current stockholders in some proportion to the stock they already own
What type of bond is generally considered low risk?
Government bonds
A portion of a corporation's profits distributed to stockholders is called _____
a dividend
True/False: Older, retired individuals are more likely to make high risk investments.
False
What indicator on a stock quote shows the highest a stock price has been in the past year?
52 Week High
What is a Corporate Bond?
A debt security issued by a corporation and sold to investors
What is a primary market?
Financial market where new issues of securities are sold
True/False: Lower risk investments tend to have lower rates of return
True
When you buy on margin, you ________
List 2 differences between a Mutual Fund and an ETF that we have discussed in class
Examples:
Mutual Funds actively managed, ETFs passively managed
Mutual Funds tend to have higher fees
ETFs price change throughout the trading day, mutual funds price are set at the end of the day
What is the term used on a stock quote that shows the measurement of a company's size?
Market Capitalization (Market Cap)
What are 2 differences between common stock and preferred stock that we have discussed in class?
Examples:
Preferred stock has priority for dividends
Common stock has voting rights, preferred stock does not
Not all publicly traded companies offer preferred stock, all offer common stock
Preferred stock has a fixed dividend rate, common stock does not
a) What do the "S" and "P" in S&P 500 stand for?
b) What does the S&P 500 track?
a) "Standard & Poor"
b) The 500 largest publicly traded companies in the US
Commodities, Mutual Fund, Individual Stock, Government Bonds
Government Bonds, Mutual Funds, Individual Stock, Commodities
List 2 advantages of diversification
Examples:
If some investments lose money, other areas could still be profitable
Limits risk by spreading out investments over different industries
Lowers volatility of investments
If Lebron invests in a high yield savings account that offers an 8% annual compound interest rate, how long will it take for his money in that account to double?
9 years