Investing and Financial Markets

Which best describes the role that government and business play in investments?

• They both receive capital to use for growth.

• They DO NOT receive capital to use for growth.

Which best describes an investor’s primary goal?

• to earn a profit

• to lose a profit

Which term refers to the possibility of an investor losing some or all of an investment?

• risk

• probability

Which is true about investments and risk?

• Every investment carries some degree of risk.

• NOT Every investment carries some degree of risk.

Which statement best describes how an investor makes money off debt?

• An investor makes money by earning interest.

• An investor DO NOT make money by earning interest.

Capital appreciation refers to

• the increased value of an asset.

• The decreased value of an asset.

Which can be traded in a commodities market?

• oil

• cars

Are the buying and selling of stocks centralized activities? Why or why not?

• No, there are many stock markets around the world, and they are independent of one another.

• Yes, the New York Stock Exchange is the principal exchange for the nations of the world.

Once stocks are on the market, which best explains how their prices are set?

• Prices fluctuate on the basis of demand.

• Prices DO NOT fluctuate on the basis of demand.

Which best describes what generally occurs in financial markets?

• Assets are traded.

• I have no idea