Investment Strategy Quiz

Investment Strategies: A Comprehensive Overview

• Investment is a commitment of resources to achieve later benefits.
• The purpose of investing is to generate a return from the invested asset.
• Investors generally expect higher returns from riskier investments.
• Diversification has the statistical effect of reducing overall risk.
• Savings bear the risk that the financial provider may default.
• Property buyers can seek to mitigate any potential risk by taking out a mortgage and borrowing at a lower loan to security ratio.
• The price-to-earnings ratio (P/E) is a fundamental ratio that divides the share price of the stock by its earnings per share.
• Growth investors seek profits through capital appreciation.
• Momentum investors generally seek to buy stocks that are currently experiencing a short-term uptrend.
• Dollar cost averaging is the process of consistently investing a certain amount of money across regular increments of time.
• Micro-investing is a type of investment strategy that is designed to make investing regular, accessible, and affordable.
• Free cash flow measures the cash a company generates which is available to its debt and equity investors, after allowing for reinvestment in working capital and capital expenditure.