ScienceEconomicsInvesting and Financial Markets example #23649
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Investing and Financial Markets example #23649

Quilla Williams avatar Quilla Williams
28 February 2023
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19 test answers

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question
bond
answer
a certificate that is purchased and then sold back later for a specified higher price
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debt
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an obligation to pay something
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equity
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the monetary value of a property or business
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invest
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to spend money or time on an asset with the hopes that it will increase in value over time
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return
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the money earned on an investment in a certain time period
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stock
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partial ownership of a corporation
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Which best describes what generally occurs in financial markets?
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Shares are traded.
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Which factors can affect a stock's price?
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-the company's financial health -market performance -the economy
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Which are common types of bonds that are currently issued?
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-municipal bonds -equity bonds -corporate bonds
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Since stocks can be traded online, which purpose is best served by markets?
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Markets regulate transactions.
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How do bonds generate income for investors?
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Bonds pay a specified amount at maturity.
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Are the buying and selling of stocks centralized activities? Why or why not?
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No, people can buy stocks anywhere, and they do not need to go through a market.
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Which best describes how an investor makes money from an equity investment?
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by selling the asset for a profit
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If a company pays dividends on a stock, does that mean that the stock has appreciated in value? Why or why not?
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No, the payment of dividends indicates that a company has earned profits.
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Bonds are considered to offer a guaranteed return, as they must be honored by law, but which is still a potential risk that investors face?
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They both receive capital to use for growth.
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Which best describes the role that government and business play in investments?
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They both invest money to earn a profit.
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Which best describes how an investor makes money off debt?
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by selling the debt
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Which term refers to the possibility of an investor losing some or all of an investment?
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risk
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Which is true about investments and risk?
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Every investment carries some degree of risk.