Junk bonds:Are bonds issued by junk yards.Are sometimes called "high yield bonds."Are less risky than government bonds.Are not actually bonds.
The astute investor is aware that:Investment risk is limited to the fortunes of the specific security purchased.Computers make investment decisions scientific and eliminate much of the risk.Actual outcome of any investment may differ from the expected outcome.When trading on-line, brokerage commissions are always negotiable.
Credit cards:Are a cost effective way of financing investment purchases.Have interest payments that are not tax deductible.Typically have lower interest rates than home equity loans.Often have 3 month grace periods on new purchases.
Dividends are taxed:At the investor’s marginal income tax rate.At a maximum rate of 15%.Only when the stock is sold.Dividends are never taxed.
Stocks whose returns are tied closely to the overall national economy are typically called:Blue Chip stocks.Defensive stocks.Speculative stocks.Cyclical stocks.
Technical analysis is a technique based on factors that are inherent to the market and include:Number of shares sold on a specific day.Number of consecutive days of price increases of a stock.Changes in the direction of movement of a market index.All of the above
The P/E ratio:Is the same for all firms in a given industry.Does not change over time.Is typically higher for firms whose earnings are expected to grow rapidly.Is the same as the dividend yield.
Gold may be a good investment if:Inflation is expected to increase.You like the color.World peace comes to pass.Foreign governments sell their gold reserves.
