Starting Investment 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 Starting Investment flashcards as text
What is a brokerage account used for?
Answer: Buying and selling securities like stocks and ETFs
A brokerage account is a platform to buy and sell investments such as stocks, bonds, and funds.
What does 'expense ratio' measure for a fund?
Answer: The annual cost charged as a percentage of assets
The expense ratio is the yearly fee a fund charges, expressed as a percent of your investment.
What is a dividend?
Answer: A share of profits paid to shareholders
A dividend is a portion of a company's earnings distributed to its shareholders.
What does 'liquidity' mean in investing?
Answer: How quickly an asset can be converted to cash
Liquidity refers to how easily and quickly an asset can be sold for cash without losing value.
Which is a sign of a scam investment for beginners?
Answer: Guaranteed high returns with no risk
Promises of guaranteed high returns with no risk are a classic red flag for fraud.
What is the difference between a market order and a limit order?
Answer: A market order executes immediately at current price; a limit order sets a price
A market order fills right away at the going price, while a limit order only fills at your specified price or better.
What is compound interest?
Answer: Interest earned on both principal and accumulated interest
Compound interest earns returns on your principal plus previously earned interest, accelerating growth.