Which best describes the role that government and business?
They both receive capital to use for growth. They both act as angel investors for start-ups. They both invest money to earn a profit. This statement best describes the role that government and business play in investments.
Which best describes what a market index does?
Which best describes what a market index does? An index measures market performance. Once stocks are on the market, which best explains how their prices are set? Prices fluctuate on the basis of demand.
Which statement best describes how an investor makes money off debt?
Which statement best describes how an investor makes money off debt? An investor makes money by issuing bonds.
Which best describes what generally happens in financial markets?
The correct answer is B) Assets are traded. What best describes what generally occurs in financial markets is “Assets are traded.” We are talking about the place where investors can buy and sell financial instruments- It could be the stock exchange .
Which is an example of a high risk investment?
Penny stocks are considered high risk investment due to lack of liquidity and risk of large fluctuations in value owing to purchase or sell by larger investors. … High Yield Bonds: This type of bonds usually offer outrageous returns in exchange for the potential risk of losing the principal itself.
Which factors can affect a stock’s price?
Factors that can affect stock prices
- news releases on earnings and profits, and future estimated earnings.
- announcement of dividends.
- introduction of a new product or a product recall.
- securing a new large contract.
- employee layoffs.
- anticipated takeover or merger.
- a change of management.
- accounting errors or scandals.
What exactly is a stock market index?
A stock market index is a statistical measure which shows changes taking place in the stock market. … The value of the stock market index is computed using values of the underlying stocks. Any change taking place in the underlying stock prices impact the overall value of the index.
How do you create a stock index?
You can create a custom index by selecting a group of stocks whose performance you wish to track as a group. If you have an online brokerage account, the process of creating a custom index merely involves choosing the shares that make up the index.
What are the 3 major stock market indexes in the US?
A comparison of three major U.S. stock indices: the NASDAQ Composite, Dow Jones Industrial Average, and S&P 500 Index.
Are debt certificates that are purchased by an investor?
Answer: Bonds are debt certificates that are purchased by an investor.
What type of investments do banks use to make a profit?
The primary source banks can use to make profits is lending money and other advances at higher rates compared to the cost of them. By buying stocks and bonds, as well as properties and the rights to loans, banks can ensure that they can gain profit from their customers in the future.
How does an investor make money off debt?
There are two ways that investors make money from bonds. The individual investor buys bonds directly, with the aim of holding them until they mature in order to profit from the interest they earn. They may also buy into a bond mutual fund or a bond exchange-traded fund (ETF).
Which examples best describes how a bank injects money into the economy?
So the best example of how a bank can inject money into the economy is to approve the mortgage for a customer.
What stocks are on the market which best explains how their prices are set?
Once stocks are on the market, which best explains how their prices are set? Prices fluctuate on the basis of demand.
Whats the relationship between risk and return?
A positive correlation exists between risk and return: the greater the risk, the higher the potential for profit or loss. Using the risk-reward tradeoff principle, low levels of uncertainty (risk) are associated with low returns and high levels of uncertainty with high returns.