How can diversification help reduce investment risk

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Questions -

Q1. What are the two ways people may make money by investing in stocks? Define each one.

Q2. How can diversification help reduce investment risk?

Q3. What is the difference between a stock's price and its value?

Q4. Describe the efficient market hypothesis.

Q5. Why might passive managers say that the much lower transaction costs for their funds are a key advantage of index funds?

Q6. Describe how mutual fund companies pick the stocks in an index fund.

Q7. What is the Dow Jones Industrial Average (the Dow) considered to represent?

Q8. What signal does the Dow index provide stock market watchers?

Q9. How do stocks and bonds serve the U.S. economy?

Q10. A business has several ways to grow without an IPO. List the ways to grow below.

Reference no: EM133157508

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