Test 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 Test flashcards as text
What is compound interest?
Answer: Interest on principal plus accumulated interest
Compound interest is earned on the principal and previously accumulated interest.
Using the Rule of 72, how long to double money at 8% annual return?
Answer: 9 years
72 divided by 8 equals approximately 9 years.
What is asset allocation?
Answer: Dividing investments among asset classes
Asset allocation divides a portfolio among asset classes like stocks, bonds, and cash.
What is a capital gain?
Answer: Profit from selling an asset above its cost
A capital gain is the profit from selling an asset for more than its purchase price.
In the US, long-term capital gains apply to assets held longer than what period?
Answer: 1 year
Assets held longer than one year qualify for long-term capital gains rates.
What is a bear market?
Answer: A market falling 20% or more
A bear market is typically a decline of 20% or more from recent highs.
What does a high dividend yield indicate relative to a stock's price?
Answer: Large dividend relative to price
Dividend yield is the annual dividend divided by price, so a high yield means a large dividend relative to price.