Exam 13: Investment Fundamentals

Since 1927 the worst 20-year performance for stocks was a ____ of ____ percent.

Diversification ____ risk,and leverage ____ risk.

Marc purchased 100 shares of LXM stock for $25 per share and sold this same stock two years later for $28 per share.He paid commissions of $50 when he purchased the stock and $55 when he sold the stock.No dividends were paid during the period he owned LXM.Marc's current income from this investment is ____,and his capital gains were ____.

Shares in the ownership of a corporation are called

Joelle purchased 100 shares of PAC stock for $20 per share and sold this same stock one year later for $25 per share.She paid commissions of $60 when she purchased the stock and $70 when she sold the stock.Dividends of $2 per share were paid during the year.The total rate of return on this investment was

Common stock investments are most vulnerable to ____ risk.

Your collection of multiple investments in different assets chosen to meet your financial goals is your

XYZ Corporation has suffered a major downturn in business and will not be able to pay interest on its bonds.This is an example of ____ risk.

A securities market in which prices have declined in value 20 percent or more from the previous high is called a bull market.

An investment that faces high marketability risk also has high liquidity risk.

Common or preferred stocks are often called equities.

With a fixed maturity,the borrower agrees to pay the investor a specific rate of return for use of the principal.