Module 6 (Part 2)

Question 1

A ________ is a financial professional who executes orders in the market on behalf of clients.

Answer 1

stockbroker

Question 2

A stockbroker may also be known as a 1)_______ or an 2)_______.

Answer 2

1. registered representative (RR)
2. investment advisor

Question 3

Most stockbrokers work for a _________ and handle transactions for several individual and institutional customers.

Answer 3

brokerage firm

Question 4

Stockbrokers are often paid on _________, although compensation methods vary by employer.

Answer 4

commission

Question 5

1)________ and 2)________ are also sometimes referred to generically as stockbrokers. These include full-service and discount brokers who execute trades but do not offer individualized investing advice.

Answer 5

1. Brokerage firms
2. broker-dealer companies

Question 6

Most ________ are discount brokers, at least at their basic service levels, in which trades are executed for free or for a small set-price commission.

Answer 6

online brokers

Question 7

Many online brokers offer _______ that automate the buying and selling process.

Answer 7

robo-advisors

Question 8

Nowadays, investors use various online platforms to engage in investing activity. One of those platforms is the _________.

Answer 8

Investagrams

Question 9

__________ is an online community where people who share the same interest in the stock market and investment collaborate.

Answer 9

Investagrams

Question 10

At a glance, 1)________ is like any other social networking site. But on ________, you and your connections can share ideas on choosing the right investments while learning the ins and outs of stock trading. Once you become a part of this online community, you’ll be able to do the following:

1. 2)_______
2. 3)_______
3. 4)_______
4. 5)_______

Answer 10

1. Investagrams
2. Learn investment strategies
3. Experience the stock market
4. Use analytical tools
5. Be part of a trading community

Question 12

Investagrams allows you to learn how to invest and make money through articles, seminars, and video subscriptions.

Answer 12

Learn investment strategies

Question 13

A priced opportunity for the investing newbie, you’ll be able to do trial-and-error virtual trading. This means you can trade without losing money and learn from the experience.

Answer 13

Experience the stock market

Question 14

Trading tools are essential for every would-be investor. Investagrams allows you to learn how to use these tools to your advantage.

Answer 14

Use analytical tools

Question 15

Fellow traders can be found in various types of groups. You can join these groups and exchange ideas and thoughts on trading. Some seasoned traders are generous enough to share tips on how to trade and grow your money.

Answer 15

Be part of a trading community

Question 16

_________ is an example of an online social network that will not only hone your trading skills but will also expand your horizons to achieve your financial goals.

Answer 16

Investagrams

Question 17

_________ is a great strategy for anyone looking to reduce risk on their investment for the long term.

Answer 17

Diversification

Question 18

The process of _________ includes investing in more than one type of asset. This means including bonds, shares, commodities, REITs, hybrids, and more in your portfolio.

Answer 18

diversification

Question 19

Investing in several different securities within each asset. A _________ spreads investments around in different securities of the same asset type meaning multiple bonds from different issuers, shares in several companies from different industries, etc.

Answer 19

diversified portfolio

Question 20

__________ is how investors divide their portfolios among different assets that might include equities, fixed-income assets, and cash and its equivalents. Investors ordinarily aim to balance risks and rewards based on financial goals, risk tolerance, and the investment horizon.

Answer 20

Asset allocation

Question 21

________ is a technique or strategy that comes as a form of investment designed to avoid market volatility or to protect another investment or portfolio against potential investment risk or loss.

Answer 21

Hedging

Question 22

Loss can be in the form of 1)_______ or 2)_______.

Answer 22

1. profit loss
2. risk loss

Question 23

When it comes to 1)_______, the hedging strategy safeguards the capital but fails to accumulate profits in the process when the risk doesn’t happen. Meanwhile, a 2)_______ is what the hedging aims to protect against in the volatile and unpredictable financial market

Answer 23

1. profit loss
2. risk loss

Question 24

1)_________ are so effective in reducing risk because they enable financial institutions to hedge, that is, engage in a financial transaction that reduces or eliminates risk. When a financial institution has bought an asset, it is said to have taken a 2)_______, and this exposes the institution to risk if the returns on the asset are uncertain. On the other hand, if it has sold an asset that it has agreed to deliver to another party at a future date, it is said to have taken a 3)_______, and this can also expose the institution to risk.

Answer 24

1. Financial derivatives
2. long position
3. short position