SGO Securities and Investments

What is the primary function of a bank?

• To provide entertainment
• To sell clothing
• To provide financial services need of it's community
• To manufacture products

Which type of bank account typically offers the highest interest rate?

• Checking account
• Savings account
• Money Market
• Certificate of deposit (CD)

Cash equivalents are short-term investments that can be easily converted to cash. Which of the following is typically considered a cash equivalent?

• Corporate bonds
• Treasury bills
• Real estate
• Stocks

What is the primary advantage of investing in real estate?

• Low risk
• High liquidity
• Potential for long-term capital appreciation
• Low maintenance costs

What is a mortgage?

• car loan
• Commercial savings account
• loan where the Collateral is real estate building
• loan with no collateral

What is the term in investing that refers to how quickly and easily a financial asset or security can be converted into cash without losing significant value

• Yield
• Liquidity
• Diversification
• Appreciation

Compound interest is interest earned on both the principal and the accumulated interest. How does compounding frequency affect the total amount earned?

• The more frequently interest is compounded, the less you will earn.
• The more frequently interest is compounded, the more you will earn.
• Compounding frequency has no impact on the total amount earned.
• Only annual compounding is allowed.

A stock represents ownership in a company. What are the two main ways investors can earn a return on their stock investments?

• Dividends and interest
• Dividends and coupons
• Interest and capital gains
• Dividends and capital gains

Securities are financial instruments that represent ownership or debt. Which of the following is a type of security?

• Bond
• Commodity
• Real estate
• Service

A mutual fund is a pool of money managed by a professional investor. What is the primary advantage of investing in a mutual fund?

• Guaranteed returns
• High liquidity
• Diversification
• Low fees