Investing, Stocks, & Bonds Flashcard

Front

What is a Certificate of Deposit (CD)?

Back

A CD is a low-risk investment where you deposit money for a fixed period and earn interest.

Front

What is the primary way to earn money from bonds?

Back

You earn interest from bonds, which is paid at regular intervals.

Front

What is the main difference between stocks and bonds?

Back

Stocks represent ownership in a company, while bonds are loans made to a company or government.

Front

What does it mean to diversify your investments?

Back

Diversifying means spreading your investments across different assets to reduce risk.

Front

What is a stock exchange?

Back

A stock exchange is a marketplace where stocks are bought and sold.

Front

What is the risk-return tradeoff in investing?

Back

The risk-return tradeoff is the principle that potential return rises with an increase in risk.

Front

What are dividends?

Back

Dividends are payments made by a corporation to its shareholders, usually from profits.

Front

What is market volatility?

Back

Market volatility refers to the degree of variation in trading prices over time.

Front

What is a bull market?

Back

A bull market is a period of rising stock prices, indicating investor confidence.

Front

What is a bear market?

Back

A bear market is a period of declining stock prices, indicating investor pessimism.