Stock Advisor For Beginners 5

Question 1

What is compound growth?

Accepted Answer

Earning returns on both your principal and prior returns

Answer

Compounding lets earnings generate their own earnings over time.

Question 2

What is an ETF?

Accepted Answer

A fund holding many assets that trades like a stock

Answer

An Exchange-Traded Fund bundles many assets and trades on exchanges like a stock.

Question 3

What does 'portfolio' mean?

Accepted Answer

The collection of all your investments

Answer

A portfolio is the full set of investments an individual holds.

Question 4

What is dividend yield?

Accepted Answer

Annual dividends as a percentage of the share price

Answer

Dividend yield shows annual dividend income relative to price.

Question 5

Why is an emergency fund recommended before investing heavily?

Accepted Answer

So you won't be forced to sell stocks at a bad time

Answer

Cash reserves prevent selling investments during emergencies or downturns.

Stock Advisor Practice Test