Business Essentials EXAM 3 Questions With
Correct Answers
time |value |of |money |- |CORRECT |ANSWER✔✔-principle |that |invested |money |grows, |over |time,
|by |earning |interest |or |some |other |form |of |return
Compound |Growth |- |CORRECT |ANSWER✔✔-compounding |of |interest |over |time—with |each |
additional |time |period, |interest |returns |accumulateE
Market |Value |- |CORRECT |ANSWER✔✔-current |price |of |a |share |of |stock |in |the |stock |market
Book |Value |- |CORRECT |ANSWER✔✔-value |of |a |common |stock |expressed |as |the |firm's |owners' |
equity |divided |by |the |number |of |common |shares
Exchange-Traded |Fund |- |CORRECT |ANSWER✔✔-bundle |of |stocks |or |bonds |that |are |in |an |index
|that |tracks |the |overall |movement |of |a |market |but, |unlike |a |mutual |fund, |can |be |traded |like |a |
stock
Mutual |Funds |- |CORRECT |ANSWER✔✔-company |that |pools |cash |investments |from |individuals |
and |organizations |to |purchase |a |portfolio |of |stocks, |bonds, |and |other |securities
Exchange-Traded |Fund |benefits |- |CORRECT |ANSWER✔✔--can |be |traded |throughout |the |day |
like |stocks
-have |lower |operating |costs |than |mutual |funds
-offer |ease |of |entry |for |investors |getting |started |without |much |money
, Mutual |Funds |benefits |- |CORRECT |ANSWER✔✔--No-load |fund |(no |fees), |load |fund
|(fees/commission |2-8%)
-80% |underperform |market |due |to |management |expenses |and |underperforming |stocks
Reasons |for |investing |- |CORRECT |ANSWER✔✔-stability |and |safety, |conservative |capital |growth,
|aggressive |growth
Primary |Securities |Market |- |CORRECT |ANSWER✔✔-market |in |which |new |stocks |and |bonds |are
|bought |and |sold |by |firms |and |governments |- |new |issues |(Initial |Public |Offering, |sale |of |
additional |stock)
Secondary |Securities |Market |- |CORRECT |ANSWER✔✔-market |in |which |existing |(not |new) |
stocks |and |bonds |are |sold |to |the |public
Investment |Banks |- |CORRECT |ANSWER✔✔--financial |institution |that |specializes |in |issuing |and |
reselling |new |securities
-Advise |companies, |underwrite, |create |distribution |networks |to |move |new |securities
Bull |market |- |CORRECT |ANSWER✔✔-period |of |rising |stock |prices, |lasting |12 |months |or |longer, |
featuring |investor |confidence |for |future |gains |and |motivation |to |buy
Bear |market |- |CORRECT |ANSWER✔✔-period |of |falling |stock |prices |marked |by |negative |
investor |sentiments |with |motivation |to |sell |ahead |of |anticipated |losses
Price |Appreciation |- |CORRECT |ANSWER✔✔-increase |in |the |dollar |value |of |an |investment |at |
two |points |in |time |(the |amount |by |which |the |price |of |a |security |increases)
Capital |gain |- |CORRECT |ANSWER✔✔-profit |realized |from |the |increased |value |of |an |investment
Correct Answers
time |value |of |money |- |CORRECT |ANSWER✔✔-principle |that |invested |money |grows, |over |time,
|by |earning |interest |or |some |other |form |of |return
Compound |Growth |- |CORRECT |ANSWER✔✔-compounding |of |interest |over |time—with |each |
additional |time |period, |interest |returns |accumulateE
Market |Value |- |CORRECT |ANSWER✔✔-current |price |of |a |share |of |stock |in |the |stock |market
Book |Value |- |CORRECT |ANSWER✔✔-value |of |a |common |stock |expressed |as |the |firm's |owners' |
equity |divided |by |the |number |of |common |shares
Exchange-Traded |Fund |- |CORRECT |ANSWER✔✔-bundle |of |stocks |or |bonds |that |are |in |an |index
|that |tracks |the |overall |movement |of |a |market |but, |unlike |a |mutual |fund, |can |be |traded |like |a |
stock
Mutual |Funds |- |CORRECT |ANSWER✔✔-company |that |pools |cash |investments |from |individuals |
and |organizations |to |purchase |a |portfolio |of |stocks, |bonds, |and |other |securities
Exchange-Traded |Fund |benefits |- |CORRECT |ANSWER✔✔--can |be |traded |throughout |the |day |
like |stocks
-have |lower |operating |costs |than |mutual |funds
-offer |ease |of |entry |for |investors |getting |started |without |much |money
, Mutual |Funds |benefits |- |CORRECT |ANSWER✔✔--No-load |fund |(no |fees), |load |fund
|(fees/commission |2-8%)
-80% |underperform |market |due |to |management |expenses |and |underperforming |stocks
Reasons |for |investing |- |CORRECT |ANSWER✔✔-stability |and |safety, |conservative |capital |growth,
|aggressive |growth
Primary |Securities |Market |- |CORRECT |ANSWER✔✔-market |in |which |new |stocks |and |bonds |are
|bought |and |sold |by |firms |and |governments |- |new |issues |(Initial |Public |Offering, |sale |of |
additional |stock)
Secondary |Securities |Market |- |CORRECT |ANSWER✔✔-market |in |which |existing |(not |new) |
stocks |and |bonds |are |sold |to |the |public
Investment |Banks |- |CORRECT |ANSWER✔✔--financial |institution |that |specializes |in |issuing |and |
reselling |new |securities
-Advise |companies, |underwrite, |create |distribution |networks |to |move |new |securities
Bull |market |- |CORRECT |ANSWER✔✔-period |of |rising |stock |prices, |lasting |12 |months |or |longer, |
featuring |investor |confidence |for |future |gains |and |motivation |to |buy
Bear |market |- |CORRECT |ANSWER✔✔-period |of |falling |stock |prices |marked |by |negative |
investor |sentiments |with |motivation |to |sell |ahead |of |anticipated |losses
Price |Appreciation |- |CORRECT |ANSWER✔✔-increase |in |the |dollar |value |of |an |investment |at |
two |points |in |time |(the |amount |by |which |the |price |of |a |security |increases)
Capital |gain |- |CORRECT |ANSWER✔✔-profit |realized |from |the |increased |value |of |an |investment
