Question 1

Which one of the following is not a recommended step individuals can use to withstand an economic downturn?

Accepted Answer

A) Establish a smaller than usual emergency fund 
B) Consider converting investments to cash to preserve value 
C) Notify lenders and credit card companies if you are unable to make payments 
D) Reduce spending 
E) Monitor the value of your investment and retirement accounts 
A) Establish a smaller than usual emergency fund 
B) Consider converting investments to cash to preserve value 
C) Notify lenders and credit card companies if you are unable to make payments 
D) Reduce spending 
E) Monitor the value of your investment and retirement accounts

Question 2

Sam Waters just received $12,000 from his grandmother's estate.He has thought about buying himself a new Harley with the money but has decided instead to add the money to his mutual fund account.What is he doing to obtain the money for investing?

Accepted Answer

A) Paying himself first 
B) Taking advantage of employer-sponsored retirement programs 
C) Participating in an elective savings program 
D) Making a special effort once or twice a year to save 
E) Sacrificing some purchases to provide financing for investments 
A) Paying himself first 
B) Taking advantage of employer-sponsored retirement programs 
C) Participating in an elective savings program 
D) Making a special effort once or twice a year to save 
E) Sacrificing some purchases to provide financing for investments

Question 3

Audrey is thinking about an investment that involves buying a written pledge by a corporation to repay a specified amount of money.It also pays interest every 6 months until it matures.What investment is Audrey thinking about purchasing?

Accepted Answer

A) Common stock 
B) Preferred stock 
C) Corporate bond 
D) Real estate 
E) Mutual fund 
A) Common stock 
B) Preferred stock 
C) Corporate bond 
D) Real estate 
E) Mutual fund

Question 4

Which one of the following investments offers the greatest opportunity for growth?

Accepted Answer

A) Bank accounts 
B) Common stock 
C) Corporate bonds 
D) Government bonds 
E) Options 
A) Bank accounts 
B) Common stock 
C) Corporate bonds 
D) Government bonds 
E) Options

Question 5

Bondholders normally receive interest payments every ________ months.

Accepted Answer

A) 3 
B) 6 
C) 9 
D) 12 
E) 24 
A) 3 
B) 6 
C) 9 
D) 12 
E) 24

Question 6

An investor concerned with a predictable source of income provided by an investment would choose:

Accepted Answer

A) U)S.government securities. 
B) commodities. 
C) options. 
D) common stocks. 
E) speculative investments. 
A) U)S.government securities. 
B) commodities. 
C) options. 
D) common stocks. 
E) speculative investments.

Question 7

Which one of the following investments would rank the highest with regard to safety?

Accepted Answer

A) U)S.Government bond 
B) Common stock 
C) Preferred stock 
D) Corporate bond 
E) Real estate 
A) U)S.Government bond 
B) Common stock 
C) Preferred stock 
D) Corporate bond 
E) Real estate

Question 8

Jack Carson earns $40,000 a year.His monthly expenses total $2,500.What is the minimum amount of money that he should set aside in an emergency fund?

Accepted Answer

A) $2,500 
B) $5,000 
C) $7,500 
D) $10,000 
E) $20,000 
A) $2,500 
B) $5,000 
C) $7,500 
D) $10,000 
E) $20,000

Question 9

Common stock that an investor expects will increase in value is known as a growth stock.

Accepted Answer

A) True 
 B)False

Question 10

Stocks provide average safety while government bonds provide ________ safety.

Accepted Answer

A) low 
B) medium 
C) high 
D) average 
E) below average 
A) low 
B) medium 
C) high 
D) average 
E) below average

Question 11

Many financial planners recommend that you choose a mutual fund with an expense ratio of:

Accepted Answer

A) 1 percent or less 
B) 2 percent or less 
C) 3 percent or less 
D) 4 percent or less 
E) 5 percent or less 
A) 1 percent or less 
B) 2 percent or less 
C) 3 percent or less 
D) 4 percent or less 
E) 5 percent or less

Question 12

Accurate record keeping can help you spot opportunities to maximize profits or reduce dollar losses when you sell your investments.

Accepted Answer

A) True 
 B)False

Question 13

Hugh Jackson is thinking about buying an investment.The investment option that he is thinking about buying is an investment where investors pool their money.One of the key features is that it is managed by professional managers.What investment is Hugh thinking about purchasing?

Accepted Answer

A) Common stock 
B) Preferred stock 
C) Corporate bond 
D) Real estate 
E) Mutual fund 
A) Common stock 
B) Preferred stock 
C) Corporate bond 
D) Real estate 
E) Mutual fund

Question 14

Once you have developed an investment program,there is no need for continued evaluation of it.

Accepted Answer

A) True 
 B)False

Question 15

Based on historical performance,which one of the following investments is most likely to provide an average return of 10 percent a year between now and the year 2025?

Accepted Answer

A) U)S.Treasury bills 
B) Corporate bonds 
C) Stocks 
D) Options 
E) Zero-coupon bonds 
A) U)S.Treasury bills 
B) Corporate bonds 
C) Stocks 
D) Options 
E) Zero-coupon bonds

Question 16

If interest rates in the overall economy increase to 8 percent,which one of the following is most likely to be the approximate market value of a $1,000 corporate bond with a fixed interest rate of 4 percent?

Accepted Answer

A) $0 
B) $400 
C) $500 
D) $1,000 
E) $1,700 
A) $0 
B) $400 
C) $500 
D) $1,000 
E) $1,700

Question 17

A corporation selling stock is obligated to:

Accepted Answer

A) guarantee the shareholders' investment. 
B) repay money obtained from the sale of that stock. 
C) repurchase shares of stock at a later date. 
D) pay dividends to the common shareholders. 
E) pay dividends to preferred stockholders before common stockholders. 
A) guarantee the shareholders' investment. 
B) repay money obtained from the sale of that stock. 
C) repurchase shares of stock at a later date. 
D) pay dividends to the common shareholders. 
E) pay dividends to preferred stockholders before common stockholders.

Question 18

John Hernandez is 24 years old and has saved enough money to fund an adequate emergency fund.In addition,he has saved $5,600 that can be used to fund an investment program.He is single,has no dependents,and would like to retire when he is 60 years old.Which one of the investment factors listed below would be most important for an investor like Mr.Hernandez?

Accepted Answer

A) Beta 
B) Investment income 
C) Investment growth 
D) Risk 
E) Investment liquidity 
A) Beta 
B) Investment income 
C) Investment growth 
D) Risk 
E) Investment liquidity

Question 19

Which of the following is defined as the increase and decrease in a nation's economic activity?

Accepted Answer

A) Business cycle 
B) Recession 
C) Monetary policy 
D) Fiscal policy 
E) Economics 
A) Business cycle 
B) Recession 
C) Monetary policy 
D) Fiscal policy 
E) Economics

Question 20

In how many of the years since 1926 have stocks lost money?

Accepted Answer

A) 0 
B) 10 
C) 25 
D) 40 
E) 55 
A) 0 
B) 10 
C) 25 
D) 40 
E) 55

Which one of the following is not a recommended step individuals can use to withstand an economic downturn?

Sam Waters just received $12,000 from his grandmother's estate.He has thought about buying himself a new Harley with the money but has decided instead to add the money to his mutual fund account.What is he doing to obtain the money for investing?

Audrey is thinking about an investment that involves buying a written pledge by a corporation to repay a specified amount of money.It also pays interest every 6 months until it matures.What investment is Audrey thinking about purchasing?

Which one of the following investments offers the greatest opportunity for growth?

Bondholders normally receive interest payments every ________ months.

An investor concerned with a predictable source of income provided by an investment would choose:

Which one of the following investments would rank the highest with regard to safety?

Jack Carson earns $40,000 a year.His monthly expenses total $2,500.What is the minimum amount of money that he should set aside in an emergency fund?

Common stock that an investor expects will increase in value is known as a growth stock.

Stocks provide average safety while government bonds provide ________ safety.

Many financial planners recommend that you choose a mutual fund with an expense ratio of:

Accurate record keeping can help you spot opportunities to maximize profits or reduce dollar losses when you sell your investments.

Hugh Jackson is thinking about buying an investment.The investment option that he is thinking about buying is an investment where investors pool their money.One of the key features is that it is managed by professional managers.What investment is Hugh thinking about purchasing?

Once you have developed an investment program,there is no need for continued evaluation of it.

Based on historical performance,which one of the following investments is most likely to provide an average return of 10 percent a year between now and the year 2025?

If interest rates in the overall economy increase to 8 percent,which one of the following is most likely to be the approximate market value of a $1,000 corporate bond with a fixed interest rate of 4 percent?

A corporation selling stock is obligated to:

Which of the following is defined as the increase and decrease in a nation's economic activity?

In how many of the years since 1926 have stocks lost money?

Personal Finance Basics and the Time Value of Money

Financial Aspects of Career Planning

Money Management Strategy: Financial Statements and Budgeting

Planning Your Tax Strategy

Financial Services: Savings Plans and Payment Accounts

Introduction to Consumer Credit

Choosing a Source of Credit: the Costs of Credit Alternatives

Consumer Purchasing Strategies and Legal Protection

The Housing Decision: Factors and Finances

Property and Motor Vehicle Insurance

Health,disability,and Long-Term Care Insurance

Life Insurance

Investing in Stocks

Investing in Bonds

Investing in Mutual Funds

Investing in Real Estate and Other Investment Alternatives

Starting Early: Retirement Planning

Estate Planning

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Exam 13: Investing Fundamentals

Which one of the following is not a recommended step individuals can use to withstand an economic downturn?

Sam Waters just received $12,000 from his grandmother's estate.He has thought about buying himself a new Harley with the money but has decided instead to add the money to his mutual fund account.What is he doing to obtain the money for investing?

Audrey is thinking about an investment that involves buying a written pledge by a corporation to repay a specified amount of money.It also pays interest every 6 months until it matures.What investment is Audrey thinking about purchasing?

Which one of the following investments offers the greatest opportunity for growth?

Bondholders normally receive interest payments every ________ months.

An investor concerned with a predictable source of income provided by an investment would choose:

Which one of the following investments would rank the highest with regard to safety?

Jack Carson earns $40,000 a year.His monthly expenses total $2,500.What is the minimum amount of money that he should set aside in an emergency fund?

Common stock that an investor expects will increase in value is known as a growth stock.

Stocks provide average safety while government bonds provide ________ safety.

Many financial planners recommend that you choose a mutual fund with an expense ratio of:

Accurate record keeping can help you spot opportunities to maximize profits or reduce dollar losses when you sell your investments.

Hugh Jackson is thinking about buying an investment.The investment option that he is thinking about buying is an investment where investors pool their money.One of the key features is that it is managed by professional managers.What investment is Hugh thinking about purchasing?

Once you have developed an investment program,there is no need for continued evaluation of it.

Based on historical performance,which one of the following investments is most likely to provide an average return of 10 percent a year between now and the year 2025?

If interest rates in the overall economy increase to 8 percent,which one of the following is most likely to be the approximate market value of a $1,000 corporate bond with a fixed interest rate of 4 percent?

A corporation selling stock is obligated to:

Which of the following is defined as the increase and decrease in a nation's economic activity?

In how many of the years since 1926 have stocks lost money?

Personal Finance Basics and the Time Value of Money

Financial Aspects of Career Planning

Money Management Strategy: Financial Statements and Budgeting

Planning Your Tax Strategy

Financial Services: Savings Plans and Payment Accounts

Introduction to Consumer Credit

Choosing a Source of Credit: the Costs of Credit Alternatives

Consumer Purchasing Strategies and Legal Protection

The Housing Decision: Factors and Finances

Property and Motor Vehicle Insurance

Health,disability,and Long-Term Care Insurance

Life Insurance

Investing in Stocks

Investing in Bonds

Investing in Mutual Funds

Investing in Real Estate and Other Investment Alternatives

Starting Early: Retirement Planning

Estate Planning

Filters