Investing and Financial Markets

Question 1

best

Revolt · Accepted Answer

by selling the asset for a profit

Question 2

Since stocks can be traded online, which purpose is best served by markets?

Revolt · Accepted Answer

Markets are where the trades actually occur.

Question 3

How do bonds generate income for investors?

Revolt · Accepted Answer

Bonds pay a specified amount to the investor at maturity.

Question 4

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

Revolt · Accepted Answer

An investor makes money by earning interest.

Question 5

Which types of investments are securities?

Revolt · Accepted Answer

both debt and equity

Question 6

Capital appreciation refers to

Revolt · Accepted Answer

the increased value of an asset.

Question 7

Which best describes what a market index does?

Revolt · Accepted Answer

An index measures market performance.

Question 8

best

Revolt · Accepted Answer

They both receive capital to use for growth.

Question 9

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

Revolt · Accepted Answer

risk

Question 10

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.

Investing and Financial Markets Answers