Investment Principles: Risk-Return Relationships, Asset Classes & Portfolio Diversification

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Finance - Personal Finance

michael1tekrzp Created by 10 mon ago

Cards in this deck(37)

What term describes how easily an asset can be converted into cash, with real estate being the least liquid?

What concept explains the relationship between higher returns on riskier investments and their safety?

What is the strategy of reducing risk through diversification by allocating an investment portfolio across broad asset classes?

What is the term for when businesses are funded through stock?

What is the term for a business funded through bonds, which they have to repay like a loan?

What type of stock ensures that dividends are paid first?

What type of stock may or may not receive dividends?

What financial instrument represents an agreement to repay investors?

What type of risk involves economic risk in the entire market, affecting all stocks?

What type of risk affects only one sector of the market, such as oil stocks when oil prices fall?

What is the term for investors pooling their money to invest in a variety of securities?

What is the term for the total amount of stock splits, not the value of all the company's stock?

What document details information about corporations issuing stock and is released to the public?

What is the measure of volatility of a stock share compared to the market, where a higher beta indicates more volatility?

What market involves stocks being first issued by corporations to investors?

What market involves buying and selling existing shares?

What is the electronic marketplace for buying and selling stock?

What type of bonds are issued by corporations?

What type of bonds are issued by the federal government and are considered less risky?

What type of bonds are issued by state and local governments, offering lower interest but less risk?

What is the legal document that lists bond information such as coupon rate and maturity date?

What is the interest rate of a bond that an investor receives, typically paid semi-annually?

What feature allows a bond issuer to pay back the bond before it matures?

What describes the inverse relationship between bond prices and market interest rates?

What is the strategy of purchasing bonds with different maturity dates to maintain a steady investment?

What is the value of a bond that will be paid at maturity?

What are the benefits of mutual funds, including diversification and professional management?

What are the disadvantages of mutual funds, such as potential management mistakes and risks?

What type of mutual fund has fees when you buy or sell shares, with salespeople providing advice?

What type of mutual fund has no transaction fees?

What measure includes all the fees associated with a mutual fund and is typically less than one percent?

What type of IRA involves pre-tax contributions that are tax-deductible, with taxes paid upon distribution?

What type of IRA involves after-tax contributions?

What does IRA stand for in the context of retirement accounts?

What type of funds invest primarily in stocks?

What type of funds invest primarily in bonds?

What type of funds invest in both stocks and bonds?

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Investment Principles: Risk-Return Relationships, Asset Classes & Portfolio Diversification

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