Podcast
Questions and Answers
What is an investment?
What is an investment?
The use of income today that allows for a future benefit.
What is a financial market?
What is a financial market?
Where buyers and sellers exchange financial assets.
What is a mutual fund?
What is a mutual fund?
A group of a wide range of stocks.
What is risk in the context of investments?
What is risk in the context of investments?
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What is return?
What is return?
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What is diversification?
What is diversification?
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What is a stock exchange?
What is a stock exchange?
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What is a capital gain?
What is a capital gain?
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What is common stock?
What is common stock?
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What is preferred stock?
What is preferred stock?
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What does a stockbroker do?
What does a stockbroker do?
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What is a stock index?
What is a stock index?
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What is a bull market?
What is a bull market?
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What is a bear market?
What is a bear market?
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What is the DOW Jones?
What is the DOW Jones?
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What is NASDAQ?
What is NASDAQ?
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What is NYSE?
What is NYSE?
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What is stock?
What is stock?
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What is speculation in investing?
What is speculation in investing?
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What is a share?
What is a share?
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What is a stock split?
What is a stock split?
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What is a brokerage firm?
What is a brokerage firm?
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What is a dividend?
What is a dividend?
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What are DOW stocks?
What are DOW stocks?
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What is white collar crime?
What is white collar crime?
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What is embezzlement?
What is embezzlement?
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What is forgery?
What is forgery?
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What is insider trading?
What is insider trading?
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What is securities fraud?
What is securities fraud?
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What is a Ponzi scheme?
What is a Ponzi scheme?
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What is the difference between common and preferred stock?
What is the difference between common and preferred stock?
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What is the difference between income and growth stocks?
What is the difference between income and growth stocks?
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What is the difference between NYSE and NASDAQ?
What is the difference between NYSE and NASDAQ?
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Why do many investors choose to invest in mutual funds instead of individual stocks?
Why do many investors choose to invest in mutual funds instead of individual stocks?
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Study Notes
Investment Basics
- Investment refers to using current income to generate future benefits.
- Financial markets facilitate the exchange of financial assets between buyers and sellers.
Understanding Financial Products
- Mutual funds consist of diversified portfolios of various stocks.
- Risk denotes the potential for loss associated with investments.
- Return represents the profit or loss realized on an investment.
Strategies and Principles
- Diversification reduces risk by spreading investments across different assets.
- Stock exchanges are platforms where securities are traded.
- Capital gain is the profit earned from selling securities at a higher price than the purchase price.
- Common stock provides voting rights and a share of profits, while preferred stock generally lacks voting rights but entitles holders to profit shares.
Market Dynamics
- Stockbrokers facilitate the buying and selling of securities for clients.
- Stock indices track the price changes of a specific set of stocks, providing insights into market performance.
- Bull markets are characterized by rising stock prices, whereas bear markets involve declining prices.
Stock Market Indicators
- The DOW Jones index measures the average price of 30 high-performing stocks, reflecting general market trends.
- NASDAQ is the largest electronic stock market in the U.S., prominent for technology stocks.
- NYSE is the largest equities exchange, located in New York City, handling trades for top U.S. and global companies.
Stock Ownership and Investment Practices
- Stock represents a share of ownership in a corporation.
- Speculation involves high-risk investments made with borrowed money in anticipation of substantial returns.
- Shares denote portions of stock.
Corporate Actions and Investment Clubs
- A stock split occurs when a company divides existing shares, increasing the number of shares available.
- Brokerage firms specialize in facilitating stock trades for clients.
- Dividends are profit distributions to shareholders based on company earnings.
Notable Stocks and Crimes
- DOW stocks include major corporations like Apple, McDonald's, and Coca-Cola.
- White-collar crimes include financially motivated offenses by business or government officials, such as embezzlement and forgery.
- Insider trading involves trading shares based on confidential information.
- Securities fraud artificially inflates stock prices to mislead investors.
- Ponzi schemes use newer investors’ funds to pay earlier ones, creating a facade of high returns.
Purchasing Options and Preferences
- Common vs. Preferred Stock: Common stock offers voting rights; preferred stock does not.
- Income vs. Growth Stocks: Income stocks provide dividends; growth stocks reinvest profits into the company.
- NYSE vs. NASDAQ: NYSE has a physical trading floor; NASDAQ operates electronically.
- Mutual funds are often preferred by investors for safety as they hold diversified portfolios across industries.
Studying That Suits You
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Description
This flashcard quiz focuses on key terms related to the stock market. Each card includes a word with its definition, helping you understand essential concepts in economics. Perfect for students and enthusiasts looking to enhance their financial literacy.