Investment Terms Practice

Scarlett is selling her old bicycle. What is the lowest price she is willing to accept for it called?

• Bid

• Ask

• Capital gain

• Diversification

Michael is considering investing in something that could help him generate additional income or increase in value over time. What is this type of item called?

• Bond

• Asset

• Bear market

• Common stock

Abigail is planning her investment strategy. What is the goal of asset allocation?

• To invest only in stocks

• To divide your investment portfolio into different categories

• To focus solely on cash investments

• To avoid bonds completely

Elijah noticed that the stock prices in his investment portfolio have been consistently decreasing over the past few months. What is a market that is falling or trending lower called?

• Bull market

• Bear market

• Capital market

• Stock market

David is looking to buy a rare collectible item at an auction. What represents the highest price David is willing to offer and pay for the item?

• Ask

• Bid

• Capital gain

• Diversification

Nora is considering buying a bond from a company. In this transaction, who is the lender?

• The seller

• The buyer

• The stockholder

• The company

Avery noticed that the stock prices of several companies have been increasing steadily over the past few months. What is this type of market called?

• Bear market

• Bull market

• Capital market

• Stock market

Emma invested in a stock and made a profit when she sold it. What is this profit or return on her investment called?

• Capital loss

• Capital gain

• Diversification

• Common stock

Daniel bought a share of stock for $500 and sold it at $200. What is this called?

• Capital gain

• Capital loss

• Asset allocation

• Diversification

Arjun recently invested in a company and received portions that allow him to own a share of the company and participate in company decisions. What are these portions called?

• Bonds

• Common stock

• Assets

• Diversification