Investing Basics
This represents partial ownership of a company.
What is a stock?
Companies use these short letter combinations, such as AAPL or MSFT, to identify their stock.
What is a ticker symbol?
You buy 10 shares of a stock for $20 each. This is the total amount you invested.
What is $200?
In investing, the possibility that you could lose money is known as this.
What is risk?
This famous New York street is commonly used as a nickname for the U.S. financial industry.
What is Wall Street?
This is the amount of money an investor earns or loses compared with the amount originally invested.
What is return?
When a company sells shares to the public for the first time, it conducts this three-letter event.
What is an IPO?
You invest $1,000 and it increases 10%. Your investment is now worth this amount.
What is $1,100?
Compared with an individual stock, this investment can hold hundreds of different stocks in one purchase.
What is an index fund or ETF?
This major index tracks 500 large U.S. companies.
What is the S&P 500?
Spreading money across different investments to reduce risk is called this.
What is diversification?
A portion of company profits paid directly to shareholders is called this.
What is a dividend?
You buy a stock for $40 and sell it for $50. Your percentage return is this.
What is 25%?
U.S. government debt securities are generally known by this name.
What are Treasury securities?
This economic term describes a general increase in prices that reduces the purchasing power of money.
What is inflation?
A market in which stock prices are generally rising is known by this animal-themed name.
What is a bull market?
This number is calculated by multiplying a company's share price by its number of outstanding shares.
What is market capitalization?
An investment worth $2,000 falls 20%. It is now worth this amount.
What is $1,600?
This type of risk affects most of the market and cannot be eliminated through diversification alone.
What is systematic risk?
A prolonged decline of roughly 20% or more from recent market highs is commonly called this.
What is a bear market?
This strategy involves investing the same amount of money at regular intervals regardless of market prices.
What is dollar-cost averaging?
If a company's stock trades at $50 and its earnings per share are $5, this valuation ratio equals 10.
What is the P/E ratio?
Using the Rule of 72, an investment earning about 8% per year would take roughly this many years to double.
What is 9 years?
An investor who chooses volatile investments because they are comfortable with large price swings has a high level of this.
What is risk tolerance?
The Dow Jones Industrial Average contains this many companies.
What is 30?