Selecting Your Investments Post-Test - SMG

The Dow Jones Industrial Average is followed by investors to tell them

• The general health of the stock market

• How the Dow Chemical stock is performing

• Whether they should diversify their portfolios

• What are the risk factors of certain stocks

Jeremy invested all of his money in airline stocks. Chris advised him to invest in companies in several different industries. Chris’ advice is for Jeremy to _________his portfolio.

A sector is a diversified group of companies

• True

• False

Mutual funds can only hold stocks

• True

• False

A group of companies producing a similar product or service is called ___

Dividing a stock’s current price per share by the issuing company’s earnings per share results in:

Stocks, bonds and mutual funds are all part of:

_____________ issue a fixed number of shares that trade on a stock exchange.

The S&P 500 Index is made up of ________.

• the 500 best performing stocks on the NASDAQ.

• 500 large-cap stocks from a wide variety of sectors.

• 500 stocks that are made up of small, mid-cap and large-cap companies.

Holding _________ from several different sectors ____________ your portfolio

• bonds, specializes

• stocks, marginalizes

• stocks, diversifies