AnswersVT-GA-EOC-Personal Finance Economics A ULHSTechnology and Economics

Investment Strategies Answers

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1
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Which are the most likely uses of capital invested in a business? Check all that apply.paying taxeshiring workersrepaying investorsproducing goodsdistributing goodsbuying materials

A
paying taxes
B
hiring workers
C
repaying investors
D
producing goods
E
distributing goods
F
buying materials
2
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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.
3

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

A
Yes, the payment of dividends indicates that a stock’s value has increased.
B
No, the payment of dividends indicates that a company has earned profits.
C
Yes, the payment of dividends indicates that a company’s assets have grown.
D
No, the payment of dividends indicates that a company can repay investors.
4

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.
5

Which types of investments are securities?

A
both debt and equity
B
debt only
C
equity only
D
neither debt nor equity
6

What can be traded in a commodities market?

A
stock
B
bonds
C
oil
D
debt
7

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.
8

Are the buying and selling of stocks centralized activities? Why or why not?

A
Yes, the New York Stock Exchange is the primary exchange for all the world’s most important trades.
B
No, people can buy stocks anywhere, and they do not need to go through a market.
C
Yes, the world’s stock markets are coordinated exchanges, and they are dependent on one another.
D
No, there are many stock markets around the world, and they are independent of one another.
9

Which is true about investments and risk?

A
Low-risk investments have a high return over the long run.
B
High-risk investments usually fail.
C
Safe investments are always somewhat profitable.
D
Every investment carries some degree of risk.
10

Capital appreciation refers to

A
the increased value of an asset.
B
the ability to make a profit from owning stock.
C
the distribution of earnings to shareholders.
D
the profitable sale of shares.

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