Personal Finance Unit 4

True A company issues stock to raise money
False There are two kinds of stock, ordinary and preferred
False Common stock holders don’t have the right to vote on company issues.
True Investors should consider selling their stocks during a bull market
True The rule of 72 describes how long an investment will take to double
False The NASDAQ is the largest stock market in the United States
True Global events can have an effect on investments such as gold.
False Compounded interest is worse for the investor because the principle decreases
True The stock market is based on the laws of supply and demand
True A company has the option to pay dividend or not
True Equity financing is a method of raising money by issuing stock
False Dividends can not be issued as cash payments
True The principal of an investment is the amount that was originally invested
False The right to company assets and earnings is not a benefit of owning stocks
False Collectibles are a low risk because everyone wants a Baseball card
Bull Market When the stock market is doing well, it is considered to be a
The greater to potential risk, the greater the potential return When it comes to investing, what is the typical relationship between risk and return?
By diversifying their investment portfolio How can investors receive compounding returns
Brokerage Firm Where do you purchase a Certificate of Deposite
Stocks Which of the following investments is affected by global events
Stock allows investors to own a portion of the company; bonds are loans to the company Which best describes the difference between stocks and bonds?
Bond When you buy a ____, you are loaning money to an organization
NASDAQ Which of the following only allows electronic trading
Stock Which investment would you purchase if you were hoping to earn dividends?
Collectibles Which of these investments is considered to be the riskiest?
It helps you to balance your risk across different types of investments Diversification is important in investing because?
Medium What level of risks are mutual funds considered?
To raise money to grow the company What is the primary reason to issue stock?
DOW Jones Which of the following is not a stock market in the United States?
Face Value This is the dollar amount an investor will receive at the maturity date of a bond.
Inflation The consistent rise in the price of goods and services
Dividends A distribution of a portion of a company’s earnings
Maturity The amount of time it takes for a bond to reach its full value
Preferred Stock Type of stock ownership that has a higher claim on assets but may not have the same voting rights
Common Stock Type of stock ownership that allows shareholders one voting right per share of stock
Supply The total amount of a good service that is available to consumers
Demand The consumer willingness and desire to pay a price for a particular good or service.

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