The net asset value (NAV) of a bond fund:Cannot be determined.Changes as interest rates change.Is determined by the average coupon rates of the bonds in the fund.Will not change as bonds in the fund are bought or sold.
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 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.
Investments in CDs:Are riskier than investments in stocks.Are inferior to investments in 8-tracks and vinyl records.Are always tax deferred.Are insured by the FDIC, but have generally underperformed stock investments over the long run.
Since the mid-1920s inflation in the United States has averaged:About 3 percent.About 7 percent.About 10 percent.About 12 percent
For most Americans, taxes are due on:January 1.April 1.April 15.December 31.
The financial pyramid implies that:An investment near the top of the pyramid has a higher potential return, but also carries higher risk.Egyptian pharoahs were astute investors.Eating nutritious meals from the "food pyramid" will make you a better investor."Pyramid" or "Ponzi" schemes are good investments.
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.