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Questions and Answers
What is the purpose of investing?
What is the statistical effect of diversification?
What is the price-to-earnings ratio (P/E)?
What do growth investors seek profits through?
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What is momentum investing?
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What is dollar cost averaging?
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What is micro-investing?
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What does free cash flow measure?
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What is the risk associated with savings?
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Study Notes
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.
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Description
Test your knowledge on investment strategies with this comprehensive overview quiz! From diversification to dollar cost averaging, this quiz covers important concepts and strategies in investing. Whether you're a beginner or an experienced investor, this quiz will challenge your understanding of key investment principles. Sharpen your investing skills and learn something new with this informative quiz.
