Exam 13: Investing Fundamentals

An example of ________ risk occurs when the financial return on an investment does not keep up with prices that are increasing in the overall economy.

Which one of the following is a true statement regarding mutual funds?

Although useful for many things,the internet cannot be used to monitor the current price of stock,bond,and mutual fund investments.

All of the following statements are considered to be good advice for a potential investor starting an investment program except:

According to many financial planners,what percentage of your assets should be invested in safer,more conservative investments if you are 25 years of age?

A line of credit is a short-term loan that is approved before the money is actually needed.

Which of the following does not offer investor services?

A $1,000 corporate bond pays 5 percent a year.What is the annual interest you will receive?

During periods of high inflation,there is a risk that the financial return on an investment will not keep pace with the rate of inflation.

Terry Hamilton has just received $22,000 from an uncle who died and is trying to decide how to invest it.She has done some research and has decided that about 30% of the money should go into large cap stocks,20% into medium cap stocks,15% into small cap stocks,10% into bonds,10% into foreign stock,and 15% into cash.She thinks that even if one area does not do that well,the rest will so that her overall return will be pretty good.What aspect of investing is Terry most concerned about?

Mike Lively is thinking about buying an investment that represents an ownership claim on a company.The most important priority he has with this investment is receiving his dividends before dividends are paid on other types of investments.What investment is Mike thinking about purchasing?

Brokerage firms,investment companies,banks,and most corporations have a home page where you can obtain valuable investment information.

After Christmas is over,Ted Riley works hard to control his expenses in February so that he can make an extra payment into a mutual fund.Which suggestion for obtaining the money he needs for investing is he following?

Few investors find many of the investor services to be too expensive for personal subscriptions.

Once you have developed an asset allocation plan for your investments,you never need to adjust it.

If interest rates in the overall economy decrease,what will happen to the market value of a corporate bond with a fixed interest rate?

Fluctuations in the prices of stocks,bonds,or other investments due to political activity may cause investors to experience ________ risk.

The first step to creating an investment plan is to establish investment goals.

Which one of the following would not be considered a safe investment for a conservative investor?

With most investments,more information is available than you can read and comprehend.