(Investor's Knowledge) 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 (Investor's Knowledge) flashcards as text
An ETF differs from a mutual fund primarily because it:
Answer: Trades on exchanges throughout the day
ETFs trade intraday on exchanges like stocks, whereas mutual funds price once per day.
A bond's price typically moves in which direction when interest rates rise?
Answer: Down
Bond prices fall when interest rates rise because existing bonds become less attractive.
What is an investor's 'risk tolerance'?
Answer: Their willingness and ability to endure losses
Risk tolerance is how much volatility and potential loss an investor can comfortably accept.
Which is a characteristic of a blue-chip stock?
Answer: Large, established, financially sound company
Blue-chip stocks are shares of large, reputable, financially stable companies.
Asset allocation refers to:
Answer: Dividing a portfolio among asset classes
Asset allocation is how an investor distributes funds across stocks, bonds, cash, and other classes.
A dividend is:
Answer: A share of profits paid to shareholders
Dividends are distributions of a company's earnings paid to its shareholders.
Liquidity describes how easily an asset can be:
Answer: Converted to cash without major loss
Liquidity measures how quickly an asset can be sold for cash near its market value.