Investing and Financial Markets

Question 1

How do bonds generate income for investors?

Revolt · Accepted Answer

Bonds pay a specified amount to the investor at maturity.

Question 2

Once stocks are on the market, which best explains how their prices are set?

Revolt · Accepted Answer

Prices fluctuate on the basis of demand.

Question 3

Which is true about investments and risk?

Revolt · Accepted Answer

Every investment carries some degree of risk.

Question 4

If a company pays dividends on a stock, does that mean that the stock has appreciated in value? Why or why not?

Revolt · Accepted Answer

No, the payment of dividends indicates that a company has earned profits.

Question 5

Which describes an investor’s primary goal of buying a loan?

Revolt · Accepted Answer

to earn a profit off the interest

Question 6

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?

Revolt · Accepted Answer

The issuer could go bankrupt.

Question 7

Which types of investments are securities?

Revolt · Accepted Answer

both debt and equity

Question 8

best

Revolt · Accepted Answer

They both receive capital to use for growth.

Question 9

What can be traded in a commodities market?

Revolt · Accepted Answer

oil

Question 10

Which best describes what a market index does?

Revolt · Accepted Answer

An index measures market performance.

Investing and Financial Markets Answers