Investment and Financial Markets Flashcard

Front

What is the primary goal of active trading?

Back

To make quick profits from small price changes

Front

Which of the following is a characteristic of a bear market? Stable market conditions, Rising stock prices, Falling prices encouraging selling, Increased stock trading

Back

Falling prices encouraging selling

Front

What does asset allocation involve?

Back

Dividing an investment portfolio among different asset categories

Front

What is a bond?

Back

A security where the investor loans money to a company or government.

Front

What is the purpose of diversification in investing?

Back

To reduce overall risk by investing in a variety of assets

Front

Which of the following best describes a bull market? A market with stable prices, A market with increased stock trading and rising prices, A market with low trading volume, A market with falling prices

Back

A market with increased stock trading and rising prices

Front

What is a mutual fund?

Back

A collection of stocks and/or bonds combined into one fund

Front

What is the main advantage of an index fund?

Back

Low fees and tracks a stock market index

Front

What is the role of a robo-advisor?

Back

To offer automated, algorithm-based portfolio management advice

Front

What is a capital gain?

Back

Profit from the sale of an asset