Stock Market Vocabulary Review

Front

Paul decides to divide his investments (usually by percentage) into specific asset classes with the hope of adding variety to his portfolio. What investment strategy best describes Paul's approach?

Back

Asset Allocation

Front

What is the technique called where an investor borrows stocks, sells them, and hopes to rebuy them when the price falls?

Back

Short Selling

Front

True or False: A bull market is a market where share prices are decreasing steadily.

Back

False

Front

Which of the following bonds has a lower risk: a corporate bond or a treasury bond?

Back

Treasury Bond

Front

Which stock market index allows investors to buy and sell stocks through an automated network of computers?

Back

Nasdaq

Front

What is the investment strategy called when you invest a certain amount every month, regardless of the asset's price?

Back

Dollar Cost Averaging

Front

What is the investment strategy called when an investor buys more shares of an asset to lower the average purchase price after its price has fallen?

Back

Averaging Down

Front

Manny has recently inherited a large sum of money. He wants to invest this money but also wants to minimize his overall risk. Which investment strategy should he use that divides investment funds across a variety of assets?

Back

Diversification

Front

Which of the following is a collection of stocks or bonds combined in a single fund that can be purchased and traded on major stock exchanges? (Hint: They are usually passively managed and typically feature less fees (expense ratios) than other fund types.) Options: Mutual Funds, ETFs, Index Funds, Bond Funds

Back

ETFs

Front

Which stock market index consists of the 30 most-traded blue-chip stocks on the New York Stock Exchange?

Back

Dow Jones Industrial Average