Investment Flashcard

Front

Which is true about risk in investing?

Back

Risk tolerance is an individual's ability and willingness to take on uncertainty, An individual's risk tolerance can change over time, Riskier investments have the potential for higher return which can influence the level of risk an investor is willing to take.

Front

Which of the following is NOT considered a speculative high risk investment that often has high price fluctuations?
Cryptocurrency, Collectibles, Precious Metals, Stock Market

Back

Stock Market

Front

Growth stocks are stocks in companies that have high potential for return whereas value stocks are those that typically trade below what they are worth. True or False?

Back

True

Front

Which investment is generally considered to be a safer investment, but typically offers lower returns? Options: Stocks, Bonds, Cryptocurrency, Foreign exchange market

Back

Bonds

Front

Which is true about bonds?

Back

Bonds are a type of loan that are repaid with interest and long-term bonds typically earn a higher return than short-term bonds.

Front

Which is true about factors that influence the prices of financial assets? Supply and demand is one key driver of price fluctuations of investments, External factors beyond a company's control such as high unemployment can impact the prices of investments, New product lines that expand a customer base can increase the value of a company and its stock price, All of the above

Back

All of the above

Front

Which is the most likely impact of decreased interest rates? Options: Consumers can borrow easier and the price of existing bonds decreases, The cost of borrowing is more expensive and bond prices tend to decrease, Consumers can borrow easier and the overall cost of real estate will increase, The cost of borrowing is more expensive and the price of real estate will decrease

Back

Consumers can borrow easier and the price of existing bonds decreases

Front

If you wanted a well-balanced portfolio for the long term with some income producing assets, what would you choose? Options: 100% stocks, 100% bonds, 90% stocks and 10% cash, 50% stocks and 50% bonds

Back

50% stocks and 50% bonds

Front

Are mutual funds a way to invest in a bundle of assets, including stocks and bonds, to provide a diversified investment that has lower risk than investing in a single asset?

Back

True

Front

Which is NOT a factor that typically impacts the management fees of a mutual fund? Active versus passive management, Mutual fund size, Asset classes within the mutual fund

Back

Historical performance of the mutual fund