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Definitions
Types of Stocks
Benefits of a Mutual Fund
Diversification
Review
100
A professionally managed group of investments bought using a pool of money from many investors.
What is a mutual fund?
100
Invest primarily in bonds (low risk; low return).
What is a bond fund?
100
The benefit that investment companies hire professional fund managers who try to pick the best securities (i.e. they do the work for you).
What is professional management?
100
Investing in a variety of securities (stocks, bonds, etc.) in order to reduce an investor's risk.
What is diversification?
100
In this type of market, investors are optimistic and confident that the overall market will rise in value.
What is a bull market?
200
Buying shares of a mutual fund instead of buying individual shares of stock.
What is indirect investing
200
Invest primarily in stocks (high risk; high return).
What is a stock fund?
200
The benefit of investing in a variety of securities in order to reduce risk.
What is diversification?
200
It reduces risk.
What is the benefit of diversification?
200
In this type of market, investors are cautious and skeptical that little to no growth will occur.
What is a bear market?
300
Choosing a combination of funds within a single mutual fund.
What is asset allocation?
300
A fund with a diverse portfolio- some high-risk; some medium-risk; some low-risk investments.
What is a balanced fund?
300
Earnings a fund pays to its shareholders.
What are dividends?
300
If you have this level of risk tolerance, you will need a high level of diversification in your portfolio.
What is a low risk tolerance?
300
The first time a company issues shares to the general public.
What is an Initial Public Offering (IPO)?
400
Earnings a fund pays to its shareholders.
What are dividends?
400
A fund that invests in companies that are expected to grow in the long run.
What is a growth fund?
400
Occur when the fund sells securities within a fund's portfolio and distributes the profits to its shareholders.
What are capital gain distributions?
400
If you have this level of risk tolerance, you will be okay with a lower level of diversification.
What is a high risk tolerance?
400
Where most Over-the-Counter trades occur.
What is the NASDAQ?
500
Payments to made shareholders that result from the sale of securities within a portfolio.
What are capital gain distributions?
500
Invest in securities to match a market index (i.e. Dow Jones, S&P 500, etc.)
What is an index fund?
500
The profits that result from an increase in value (i.e. buying low; selling high).
What are capital gains?
500
The opening sentence in a short-answer response in which you clearly state the topic of your response.
What is a claim sentence?
500
A market in which investors are neither skeptical nor optimistic, but somewhere in the middle.
What is a bobcat market?