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Investment Test Study Guide With Complete Answers Guaranteed Pass.

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diversification - to spread around one's investment dollars among several different classes of financial assets and among several different classes of financial assets and among the securities of many issuers results in lowered risk. risk return ration - relationship of substantial reward in com...

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  • August 22, 2024
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RealGrades
Investment Test Study Guide With
Complete Answers Guaranteed Pass.

diversification - to spread around one's investment dollars among several different classes of financial
assets and among several different classes of financial assets and among the securities of many issuers
results in lowered risk.



risk return ration - relationship of substantial reward in comparison to the amount of risk taken.



liquidity - quality of an asset that permits it to be converted quickly into cash without loss of value;
availability of money; when there is more liquidity, there is typically less return.



share - piece of ownership in a company or mutual fund.



commodity - a food, mental, or fixed physical substance that investors buy of sell, usually via future
contracts.



dividends - distribution of a portion of a company's earnings, decided by the board of directors, to a
class of its shareholders; generally distributed in the form of cash or stock.



annuities - contract sold by an insurance company, designed to provide payments to the holder at
specified intervals, usually after retirement; the holder is taxed at the time of distribution or withdrawal,
making this a tax-deferred arrangement.



certificate of deposit - usually at a bank; savings account with a slightly higher interest rate because of a
longer savings commitment.



mutual funds - pool of money managed by an investment company and and invested in multiple
companies, bonds, etc,; offers investors a variety of goals depending on the fund ad its investment
charter; often used to generate income on a regular basis or to preserve an investor's money;
sometimes used to invest in companies that are growing at a rapid pace.

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