Dave Ramsey Investments Flashcard

Front

What is the difference in risk between single stocks and mutual funds?

Back

Single stocks carry a higher risk compared to mutual funds due to lack of diversification.

Front

What term describes a market that is performing well?

Back

Bull Market.

Front

What are stocks?

Back

Securities that represent part ownership or equity in a corporation.

Front

What are the types of long-term investments that are properly diversified?

Back

Growth, growth and income, international, aggressive growth mutual funds.

Front

What is a mutual fund?

Back

Buying little pieces of a whole lot of different companies.

Front

What is a Bear Market?

Back

A market condition where prices are falling, typically by 20% or more.

Front

What is a Bond?

Back

A fixed income instrument that represents a loan made by an investor to a borrower.

Front

What does diversification mean in investing?

Back

Spreading investments across various financial instruments to reduce risk.

Front

What is the purpose of investing in mutual funds?

Back

To achieve diversification and professional management of investments.

Front

What is an aggressive growth fund?

Back

A mutual fund that invests primarily in stocks with high growth potential.