Capital appreciation refers to-the increased value of an asset.the ability to make a profit from owning stock.the distribution of earnings to shareholders.the profitable sale of shares.

You are watching: Which best describes how an investor makes money from an equity investment?


Which factors can affect a stock"s price? Check all that apply.market performancethe company"s financial healththe quantity products producedlocation of the companythe economy
Which is true about investments and risk?Low-risk investments have a high return over the long run.High-risk investments usually fail.Safe investments are always somewhat profitable.Every investment carries some degree of risk.
What is one way in which bonds do not generate income for investors?Bonds appreciate in value.Bonds pay interest.Bonds pay a specified amount at maturity.Bonds pay dividends.
Which statement best describes how an investor makes money off debt?An investor makes money by issuing bonds.An investor makes money by earning interest.An investor makes money by raising capital.An investor makes money by being repaid for the principal.
Which are common types of bonds that are currently issued? Check all that apply.corporate bondsequity bondsmunicipal bondsTreasury billsTreasury noteswar bonds
If a company pays dividends on a stock, does that mean that the stock has appreciated in value? Why or why not?Yes, the payment of dividends indicates that a stock"s value has increased.No, the payment of dividends indicates that a company has earned profits.Yes, the payment of dividends indicates that a company"s assets have grown.No, the payment of dividends indicates that a company can repay investors.
Which best describes how an investor makes money from an equity investment?by earning interestby selling the asset for a profitby raising capitalby growing the asset
Which are the most likely uses of capital invested in a business? Check all that apply.paying taxeshiring workersrepaying investorsproducing goodsdistributing goodsbuying materials
Which best describes the role that government and business play in investments?They both use taxes to support a country"s growth.They both invest money to earn a profit.They both receive capital to use for growth.They both act as angel investors for start-ups.
Which types of investments are securities?both debt and equitydebt onlyequity onlyneither debt nor equity
Which best describes what a market index does?An index measures market performance.An index measures economic trends.An index measures growth.An index measures the performance of a single stock.
Which best describes an investor"s primary goal?to grow a businessto earn a profitto bolster the economyto provide capital to a business
Since stocks can be traded online, which purpose is best served by markets?Markets regulate transactions.Markets are where the trades actually occur.Markets sell the assets to be traded.Markets ensure that the transactions are secure.

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Which best describes what generally occurs in financial markets?Debt and loans are traded.Assets are traded.Commodities are traded.Shares are traded.Assets are traded.
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