Exam 11: Investment Basics

Alice just inherited an antique wood burning stove.While she appreciates the sentimental value of the stove she is concerned that an investment such as this might not be able to be converted into cash quickly at a fair market price.Alice is worried about ________ on this as an investment.

You own a bond issued by BMW,a German company.What kind of risk are you exposed to?

Some types of investments expose you to multiple sources of risk.

A(n)________ account represents the money or investments you have at a brokerage firm.

The ________ plays on the fear of regret and the seeking of pride,resulting in selling winning stocks too soon and keeping losing stocks too long.

The nominal rate of interest that investors demand will increase with an increase in the expected rate of inflation.

The ________ is the stated amount on the face of a bond,which the firm is to repay at the maturity date.

A typical bond will pay annual coupon payments until it matures,at which time it will surrender its par value to the owner of the bond.

According to your text,"falling in love" with your stock is a good idea.