AnswersCHS EconomicsInvesting and Financial Markets

3.4 Investing and Financial Markets Answers

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21
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Which statement best describes how an investor makes money off debt?

A
An investor makes money by issuing bonds.
B
An investor makes money by earning interest.
C
An investor makes money by raising capital.
D
An investor makes money by being repaid for the principal.
22
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What can be traded in a commodities market?

A
stock
B
bonds
C
oil
D
debt
23

best

b
by earning interest
b
by selling the asset for a profit
b
by raising capital
b
by growing the asset
24

Which types of investments are securities?

A
both debt and equity
B
debt only
C
equity only
D
neither debt nor equity
25

Which factors can affect a stock’s price? Check all that apply.

A
market performance
B
the company’s financial health
C
the quantity products produced
D
location of the company
E
the economy
26

Which best describes what a market index does?

A
An index measures market performance.
B
An index measures economic trends.
C
An index measures growth.
D
An index measures the performance of a single stock.
27

most

p
paying taxes
h
hiring workers
r
repaying investors
p
producing goods
d
distributing goods
b
buying materials
28

How do bonds generate income for investors?

A
Bonds depreciate in value.
B
Bonds protect investors from bankruptcy.
C
Bonds pay interest to the bank that sold the bond.
D
Bonds pay a specified amount to the investor at maturity.
29

Which term refers to the possibility of an investor losing some or all of an investment?

A
risk
B
likelihood
C
probability
D
chance
30

Which best describes the role that government and business play in investments?

A
They both use taxes to support a country’s growth.
B
They both invest money to earn a profit.
C
They both receive capital to use for growth.
D
They both act as angel investors for start-ups.

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