12 Questions
What is the primary factor that determines bond rates?
Interest rates
What is the minimum amount required to invest in a mutual fund?
$1,000
What is the primary benefit of investing in mutual funds?
Diversification into multiple stocks
What is the main difference between mutual funds and ETFs?
Trading hours
What is the purpose of a portfolio manager in a mutual fund?
To allocate stocks and bonds
What is an asset class?
A grouping of investments with similar characteristics
What is the benefit of ETFs tracking an underlying index?
Broad coverage of various sectors and markets
What is the safest asset class?
Cash
What is a bond?
A debt instrument representing a loan
What is a characteristic of a CD?
It has a fixed interest rate and a locked-up period
What does the investment risk ladder show?
The risk level of different asset classes, in ascending order
Why do CDs typically provide higher interest rates than savings accounts?
Because they are less liquid and have a locked-up period
Learn about asset classes, their definitions, and examples. Understand the investment risk ladder, and how cash, bonds, stocks, and other assets fit into it.
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