Practice Test Geeks(ABC) Accredited Business Communicator Practice Test
← All ABC Flashcard Decks

Investment Strategies Flashcards

7 cards from real ABC practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.

Read the first 7 Investment Strategies flashcards as text

  1. A public relations team is drafting a press release about their company's ESG investment fund launch. ESG stands for:

    Answer: Environmental, Social, and Governance

    ESG investing evaluates companies on Environmental, Social, and Governance criteria alongside financial metrics.

  2. Which investment vehicle pools money from many investors to purchase a diversified portfolio of stocks or bonds, managed by a professional?

    Answer: Mutual fund

    Mutual funds aggregate capital from multiple investors and are managed by professional portfolio managers to achieve stated objectives.

  3. When explaining liquidity risk in a stakeholder report, a communicator should convey that it refers to:

    Answer: The risk of not being able to sell an asset quickly at fair value

    Liquidity risk is the danger of being unable to convert an investment to cash quickly without a significant price concession.

  4. A financial communicator explaining a 'rebalancing' strategy to employees should describe it as:

    Answer: Restoring a portfolio to its target asset allocation after market shifts

    Rebalancing realigns a portfolio's asset mix to its original target weights after market fluctuations cause drift.

  5. Which of the following best describes a passive investment strategy?

    Answer: Tracking a market index with minimal trading activity

    Passive investing seeks to replicate index performance rather than beat the market, typically resulting in lower fees and turnover.

  6. In investor relations communications, which metric is most commonly used to communicate a stock's relative valuation?

    Answer: Price-to-earnings (P/E) ratio

    The P/E ratio compares a company's share price to its earnings per share, signaling whether the stock is over- or undervalued relative to peers.

  7. A business communicator advising on a capital campaign must understand that 'opportunity cost' in investing means:

    Answer: The foregone return from the next best alternative investment

    Opportunity cost represents the potential return sacrificed by choosing one investment over the next best available option.