Investing Vocabulary

Active Trading is:

• a long-term investment strategy

• a short-term investment strategy

• a type of savings account

• a form of passive income

Asset Allocation is a strategy that involves dividing an investment portfolio among different asset categories. Which of the following is NOT typically considered an asset category?

• Stocks

• Bonds

• Real Estate

• Weather

An Asset Class is a group of financial instruments that have similar financial characteristics and behave similarly in the marketplace.

• A type of investment strategy

• A group of financial instruments with similar characteristics

• A financial market

• A type of asset management

A Bear Market is characterized by:

• A prolonged period of rising stock prices

• A prolonged period of declining stock prices

• A short-term increase in stock prices

• Stable stock prices over a long period

A Bond is:

• a type of stock

• a type of loan

• a type of currency

• a type of commodity

Bond Rating is a measure of:

• a company's profitability

• a bond's credit quality

• a stock's market value

• an investor's risk tolerance

A Brokerage Account is:

• a type of savings account

• an account that allows you to buy and sell securities

• a retirement account

• an account for storing physical assets

A Bull Market is characterized by:

• Rising prices and investor confidence

• Falling prices and investor pessimism

• Stable prices with no significant changes

• High volatility with unpredictable trends

What is Capital Gain?

• A type of income earned from the sale of an asset

• A type of tax levied on property

• A type of investment strategy

• A type of financial loss

Capital Gains Tax is a tax on:

• income from salary

• profits from the sale of assets

• inheritance received

• interest earned on savings