12 Questions
What is the primary risk associated with certificates of deposit (CDs)?
Early withdrawal penalties
What is the primary characteristic of an asset class?
Similar laws and regulations
What is the primary advantage of a cash bank deposit?
Precise knowledge of interest earned
What is the primary role of the borrower in a bond transaction?
To issue a fixed interest rate to the lender
Why do cash investments often fail to beat inflation?
Due to low interest rates
What is the primary purpose of an investment risk ladder?
To rank investments by risk and potential return
What is the primary factor that determines bond rates in organizations?
Interest rates
What is the minimum investment required to invest in a mutual fund?
$1,000 per share
How are mutual funds valued?
At the end of each trading day
What is a characteristic of exchange-traded funds (ETFs)?
They can track underlying indexes
What is the primary benefit of investing in mutual funds?
Diversification into various stocks and securities
What is the claim of shareholders on a company's assets in the event of liquidation?
A claim on the company's assets
Learn about asset classes, their characteristics, and how they fit into the investment risk ladder. Understand the different types of asset classes, from cash to higher-risk investments.
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