Fundamentals Flashcards
7 cards from real Investment practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Fundamentals flashcards as text
What does ROI stand for?
Answer: Return on Investment
ROI (Return on Investment) measures the gain or loss generated relative to the amount invested.
Which asset class is generally considered the lowest risk?
Answer: U.S. Treasury bills
U.S. Treasury bills are backed by the federal government and are considered among the safest investments.
What is equity in the context of investing?
Answer: Ownership interest in a company, such as shares of stock
Equity represents ownership in a company, typically held as shares of stock.
What does a 'bull market' indicate?
Answer: A period of rising asset prices and optimism
A bull market is characterized by sustained rising prices and investor optimism.
In portfolio management, what is 'asset allocation'?
Answer: Dividing investments among categories like stocks, bonds, and cash
Asset allocation is the strategy of spreading capital across asset classes to balance risk and return.
What is a fiduciary duty in investment roles?
Answer: A legal obligation to act in the client's best interest
A fiduciary must put the client's interests ahead of their own when managing money.
What does 'AUM' stand for in asset management?
Answer: Assets Under Management
AUM (Assets Under Management) is the total market value of investments a firm manages on behalf of clients.