stocks and bonds

What is an advantage of municipal bonds?

• they are usually tax free

• they pay high returns

• they are more liquid than a savings account.

• they are high risk

When a stockholder receives dividends, he is receiving...

• an interest payment from his loan. 
• A part of the company's profits. 
• Money made by selling a stock for more than he originally paid. 
• Money made by selling a stock for less than he originally paid. 

What is a municipal bond?

• when you purchase part of a company
• part of a company's profits
• a loan to a company
• a loan to a city government

What is a stock?

• when you purchase part of a company
• part of a company's profits
• a loan to a company
• a loan to a city government

People buy stocks because...

• they expect to earn a return
• there is no chance of a loss
• they are guaranteed interest payments each year
• the government encourages them to buy stock

Tags

CCSS.RI.7.2

CCSS.RI.8.2

CCSS.RL.11-12.2

CCSS.RL.8.1

CCSS.RL.9-10.2

What is a bond? 

• a certificate of ownership in a corporation, with the right to a share of the earnings 
• a certificate representing a loan from an investor to a corporation or government entity 
• a payment from an investor to a corporation for the rights to future profits 
• a group of stocks sold together for a set price 

To minimize the risk of stock investing, an investor may choose to own a portfolio consisting of shares of stock from various companies in different industries. This strategy is known as:

• options trading
• diversification
• trading at a discount
• tax sheltering

Which one of the following investment vehicles has the highest risk?

• stocks
• bonds
• money market accounts
• savings accounts

True or False. Investment in stocks has the potential for greater returns in exchange for assuming greater risk.

• True
• False
• It depends

When an investor lends money to a corporation or the government, he/she purchases:

• futures
• stocks
• options
• bonds