Financial Literacy and Institutions Quiz

Stock exchanges facilitate trading of securities rather than providing financial services.

APR represents the annualized cost of borrowing or earned through an investment.

Bonds represent debt, not ownership, hence bondholders don't have ownership rights in the issuing company.

Financial planners offer advice and strategies to individuals to improve financial health and meet objectives.

MBA accounts aren't investment accounts; common types include brokerage, retirement, and savings accounts.

Liquidation involves selling off assets, often in cases of bankruptcy or winding down a business.

The SEC primarily oversees securities markets, ensuring fair and transparent trading.

ROI measures the profitability of an investment relative to its cost.

Central banks control monetary policy, influencing economic stability through money supply and interest rate management.

Liquidity describes the ease with which an asset can be sold or converted into cash without affecting its price significantly.

Diversification spreads investment across various assets to mitigate the impact of any single investment's poor performance on the portfolio.

Credit rating agencies evaluate the credit risk of individuals, companies, and securities.

Marital status usually doesn't impact creditworthiness; factors like payment history and income are more relevant.