Investing Principles Part I Quiz
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Questions and Answers

What is the meaning of ROI in investing?

  • Risk of Investment
  • Rate of Interest
  • Rate of Inflation
  • Return on Investment (correct)
  • What does IPO stand for in the context of investing?

  • Investment Portfolio Option
  • Investment Price Outlook
  • Initial Profit Offering
  • Initial Public Offering (correct)
  • What does SEC stand for in the context of investing?

  • Securities and Exchange Commission (correct)
  • Secured Equity Consortium
  • Stock Exchange Corporation
  • Stock Evaluation Committee
  • What is the primary purpose of diversification in investment?

    <p>To reduce the overall risk of the investment portfolio</p> Signup and view all the answers

    What does ETF stand for in the context of investing?

    <p>Exchange-Traded Fund</p> Signup and view all the answers

    Study Notes

    Investing Terms

    • ROI stands for Return on Investment, a measure of the return or profit that an investment generates in relation to its cost.

    Initial Public Offering

    • IPO stands for Initial Public Offering, the first sale of stock by a company to the public, allowing it to raise capital and become a publicly traded company.

    Securities and Exchange Commission

    • SEC stands for Securities and Exchange Commission, a US government agency responsible for protecting investors, maintaining fair and orderly markets, and facilitating capital formation.

    Diversification

    • The primary purpose of diversification in investment is to reduce risk by allocating assets across different classes, industries, or geographic regions, thereby minimizing the impact of any one investment's performance on the overall portfolio.

    Exchange-Traded Funds

    • ETF stands for Exchange-Traded Fund, an investment fund that is traded on a stock exchange, like individual stocks, and tracks an index, commodity, or sector, offering diversification and flexibility to investors.

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    Description

    Test your knowledge of investing principles with this quiz covering key vocabulary and concepts such as stocks, bonds, portfolios, assets, liabilities, dividends, and more.

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