Investing Terms for Beginners #1

What is a bond in investment terms?

• A type of stock that represents ownership in a company

• A loan provided to governments or corporations that pays interest

• A type of insurance policy for investments

• A mutual fund that pools money from many investors

What tracks a specific industry?

• Electronic Transfer Fee

• Exchange-Traded Fund

• Equity Transfer Fund

• Economic Trade Fund

What is a mutual fund?

• A company that pools money from investors to invest in a portfolio

• A private loan agreement

• A government-issued security

• A type of cryptocurrency

What is a characteristic of a bear market?

• Stock prices are rising

• The market is stable

• Investing is less risky

• Stock prices are falling

What is a bull market?

• A market where stock prices are stable

• A market where stock prices are falling

• A market where investments are very risky

• A market where stock prices are rising

What is the difference between common stock and preferred stock?

• Preferred stockholders get special benefits like higher dividends

• Common stock offers higher dividend payments

• Preferred stock gives ownership in a company

• Common stockholders have special permissions regarding dividends

What is a dividend?

• An interest payment on bonds

• A type of stock

• A fee for trading stocks

• A payment made to shareholders

What is a 401(k)?

• A type of mutual fund

• A government bond

• A personal loan for retirement

• A retirement plan offered by employers

What is a Roth IRA?

• An insurance policy

• A retirement account with taxed contributions

• A type of stock

• A credit score improvement tool

What does liquidity refer to in investments?

• The dividend payout ratio

• The volatility of the stock market

• The interest rate on a loan

• The ability to convert an asset into cash quickly