What is a bond, in finance?
AnswerA loan to a company or government that pays interest
A bond is a debt security: the buyer lends money to the issuer, who pays interest and returns the principal later.
Money · Facts & stats
Investment facts & stats
7 fact-checked facts about investment basics, each with the reason behind it. 5 more are in today's round and join this page after it closes.
The basics
What does a 'bull market' describe?
AnswerA period of generally rising prices
A bull market is a sustained rise in prices; its opposite, a bear market, is a sustained fall.
Going deeper
If $100 earns 10% interest compounded once a year, what is it worth after 2 years?
Answer$121
After year one it is $110, and 10% of $110 is $11, giving $121 after year two.
In finance, what does 'liquidity' measure?
AnswerHow easily an asset can be turned into cash
A liquid asset can be sold or converted to cash quickly without losing much value; cash itself is the most liquid.
Using the Rule of 72, roughly how long does money take to double at 6% a year?
Answer12 years
The Rule of 72 estimates doubling time by dividing 72 by the annual percentage rate: 72 / 6 = 12.
Expert level
What does 'P/E' stand for in a P/E ratio?
AnswerPrice to earnings
The P/E ratio divides a share's price by the company's earnings per share.
The Buttonwood Agreement of 1792 is seen as the founding of which exchange?
AnswerNew York Stock Exchange
In 1792, 24 brokers signed the Buttonwood Agreement under a buttonwood tree, laying the groundwork for the NYSE.
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