Questions and Answers
Which can be traded in a commodities market?
Are the buying and selling of stocks centralized activities? Why or why not?
No, people can buy stocks anywhere and do not need to go through a market.
What is an investor's primary goal?
To earn a profit
What does the term 'risk' refer to in investing?
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How does an investor make money off debt?
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How does an investor make money from an equity investment?
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What does a market index measure?
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How are stock prices set once they are on the market?
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Which types of investments are considered securities?
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Every investment carries some degree of risk.
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What purpose do markets serve since stocks can be traded online?
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Which factors can affect a stock's price? (Check all that apply)
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What is a potential risk investors face with bonds?
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What are the most likely uses of capital invested in a business? (Check all that apply)
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Study Notes
Commodities Market
- Oil is a tradable commodity in the commodities market.
Stock Market Dynamics
- Stock trading is decentralized; purchases can occur anywhere without a centralized market.
- Prices of stocks are determined by fluctuating demand once they are on the market.
Investor Goals and Earnings
- The primary goal of an investor is to earn a profit from investments.
- Investors earn money from debt through interest and from equity by selling assets for a profit.
Risk in Investing
- Risk refers to the possibility of losing some or all of an investment.
- All investments carry varying degrees of risk.
Market Index and Performance Measurement
- A market index serves to measure the performance of the market.
Securities and Investment Types
- Securities encompass both debt instruments and equity ownership.
Capital Investment Utilization
- Capital invested in a business is likely used for hiring workers, producing and distributing goods, and purchasing materials.
Bond Investment Characteristics
- Bonds offer a guaranteed return due to legal obligation, but there is a risk that the issuer may not achieve profitability.
Market Regulation
- Markets serve the purpose of regulating transactions, even in an online trading environment.
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Description
Test your knowledge on key concepts in investing and financial markets with these flashcards. Learn about commodities, stock trading, and the primary goals of investors. Perfect for anyone looking to enhance their understanding of economics.
