Question 1

Which one of these investments pools the money from many investors,hires a professional money manager to manage those funds,and offers diversification to investors?

Accepted Answer

A) NOW account 
B) Securities exchange 
C) Certificate of deposit 
D) Mutual fund 
E) Stock option 
A) NOW account 
B) Securities exchange 
C) Certificate of deposit 
D) Mutual fund 
E) Stock option

Question 2

Which one of the following statements is true?

Accepted Answer

A) Investors should put all of their "eggs in one basket." 
B) Individuals can ignore their tolerance for risk when selecting specific investments. 
C) Diversification is one way to increase your risk. 
D) The amount of time a specific investment has to work is an important factor when managing an investment. 
E) Younger investors tend to invest a large percentage of their portfolio in conservative investments. 
A) Investors should put all of their "eggs in one basket." 
B) Individuals can ignore their tolerance for risk when selecting specific investments. 
C) Diversification is one way to increase your risk. 
D) The amount of time a specific investment has to work is an important factor when managing an investment. 
E) Younger investors tend to invest a large percentage of their portfolio in conservative investments.

Question 3

Karen Johnson paid $1,000 for a corporate bond issued by an oil and gas corporation.The annual interest rate for the bond is 6 percent.
a.What is the annual interest amount for this bond?
b.Since the annual interest for this bond is paid every six months or semiannually,how much will Karen receive for her bond each six months?
c.If comparable,new bonds pay 8 percent interest,what is the approximate market value for Karen's oil and gas bond?

Accepted Answer

a.$1,000 × 0.06 = $60 annual i

Question 4

Matt Jackson is single and 28 years old.He has just graduated from college with a master's degree and obtained a job making $27,500 a year.Which one of the following investments would you recommend for his long-term investment program?

Accepted Answer

A) Corporate bonds 
B) Government bonds 
C) Growth stocks 
D) Certificates of deposits 
E) Savings account 
A) Corporate bonds 
B) Government bonds 
C) Growth stocks 
D) Certificates of deposits 
E) Savings account

Question 5

The advantages of asset allocation include all of the following except:

Accepted Answer

A) It lessens risk for the investment program. 
B) It helps avoid the pitfall of putting all your eggs in one basket. 
C) It uses different asset classes to provide a measure of safety. 
D) It helps offset a loss in one investment with gains in other investments. 
E) It is extremely difficult to find the right mix of asset classes. 
A) It lessens risk for the investment program. 
B) It helps avoid the pitfall of putting all your eggs in one basket. 
C) It uses different asset classes to provide a measure of safety. 
D) It helps offset a loss in one investment with gains in other investments. 
E) It is extremely difficult to find the right mix of asset classes.

Question 6

Chris O'Donnell is thinking about investing in an investment that is high-risk in the hope of earning a relatively large profit in a short amount of time.Which investment is he most likely considering?

Accepted Answer

A) U)S.government bond 
B) Certificate of deposit 
C) Low-growth stock 
D) Speculative stock 
E) Low-risk bond 
A) U)S.government bond 
B) Certificate of deposit 
C) Low-growth stock 
D) Speculative stock 
E) Low-risk bond

Question 7

Potential investors should not wait until their financial affairs are in good shape before starting an investment program.

Accepted Answer

A) True 
 B)False

Question 8

Allison Peavy wants to invest but is worried about risk.In particular,she is worried that bad management and increased competition in the wireless phone market will make these companies less profitable than expected.What type of risk is Allison most concerned with?

Accepted Answer

A) Inflation 
B) Interest rate 
C) Business failure 
D) Systematic 
E) None of these 
A) Inflation 
B) Interest rate 
C) Business failure 
D) Systematic 
E) None of these

Question 9

The investment pyramid describes four levels of investment.State the name of each level and provide examples of investments at each level.

Accepted Answer

Level 1: Financial Security: Examples in

Question 10

After the death of her husband,Gina Baker,35,received a check for $250,000 from a life insurance company.Gina has two small children and wants to make sure that both she and the children are taken care of in the future.Based on this information,which of the investment factors listed below would be the most important to Gina in her investment program?

Accepted Answer

A) Beta 
B) Safety 
C) Business failure 
D) Market risk 
E) Liquidity 
A) Beta 
B) Safety 
C) Business failure 
D) Market risk 
E) Liquidity

Question 11

Which one of the following investments offers the least liquidity?

Accepted Answer

A) Checking account 
B) Near-cash investment 
C) Real estate 
D) Savings account 
E) Certificate of deposit 
A) Checking account 
B) Near-cash investment 
C) Real estate 
D) Savings account 
E) Certificate of deposit

Question 12

The rate of return on an investment has no effect on an investment program.

Accepted Answer

A) True 
 B)False

Question 13

Which newspaper is one of the most readily available sources of information for the average investor?

Accepted Answer

A) The Wall Street Journal 
B) Government publications 
C) Corporate reports 
D) www.google.com 
E) www.yahoo.com 
A) The Wall Street Journal 
B) Government publications 
C) Corporate reports 
D) www.google.com 
E) www.yahoo.com

Question 14

If you invest $2,000 in a stock and the stock pays you $35 in dividends each year and is worth $2,150 at the end of one year,then what is your rate of return?

Accepted Answer

A) 9.25% 
B) 8.25% 
C) 7.25% 
D) 6.25% 
E) 5.25% 
A) 9.25% 
B) 8.25% 
C) 7.25% 
D) 6.25% 
E) 5.25%

Question 15

Which of the following is not true of mutual funds?

Accepted Answer

A) Mutual funds range from very conservative to extremely speculative investments. 
B) They do not offer diversification. 
C) They can be used for retirement accounts. 
D) This investment provides professional management. 
E) A mutual fund pools the money from many investors. 
A) Mutual funds range from very conservative to extremely speculative investments. 
B) They do not offer diversification. 
C) They can be used for retirement accounts. 
D) This investment provides professional management. 
E) A mutual fund pools the money from many investors.

Question 16

The amount of time that your investments have to work for you is an important factor when establishing your long-term investment program.

Accepted Answer

A) True 
 B)False

Question 17

Which one of the following investments would provide the most predictable source of income?

Accepted Answer

A) Global mutual funds 
B) Real estate 
C) Collectibles 
D) Common stock 
E) U)S.Government securities 
A) Global mutual funds 
B) Real estate 
C) Collectibles 
D) Common stock 
E) U)S.Government securities

Question 18

Gina Davidson has received $35,000 in a divorce settlement and is trying to decide how to invest it.She has looked at stocks but is uncertain as some stocks have lost a lot of value for their owners recently.What aspect of investing is she most concerned about?

Accepted Answer

A) Risk 
B) Inflation 
C) Diversification 
D) Liquidity 
E) Investment growth 
A) Risk 
B) Inflation 
C) Diversification 
D) Liquidity 
E) Investment growth

Question 19

Forty years ago,you began investing $2,000 a year.Because your investments earned an average of 2 percent a year,your investment portfolio has a current dollar value of $120,804.How much did you earn on your investments over the 40-year period of time?

Accepted Answer

A) $2,000 
B) $40,000 
C) $40,804 
D) $80,000 
E) $120,804 
A) $2,000 
B) $40,000 
C) $40,804 
D) $80,000 
E) $120,804

Question 20

The average credit card debt for a graduating college student is over:

Accepted Answer

A) $500. 
B) $3,000. 
C) $4,000. 
D) $5,000. 
E) $10,000. 
A) $500. 
B) $3,000. 
C) $4,000. 
D) $5,000. 
E) $10,000.

Which one of these investments pools the money from many investors,hires a professional money manager to manage those funds,and offers diversification to investors?

Which one of the following statements is true?

Matt Jackson is single and 28 years old.He has just graduated from college with a master's degree and obtained a job making $27,500 a year.Which one of the following investments would you recommend for his long-term investment program?

The advantages of asset allocation include all of the following except:

Chris O'Donnell is thinking about investing in an investment that is high-risk in the hope of earning a relatively large profit in a short amount of time.Which investment is he most likely considering?

Potential investors should not wait until their financial affairs are in good shape before starting an investment program.

Allison Peavy wants to invest but is worried about risk.In particular,she is worried that bad management and increased competition in the wireless phone market will make these companies less profitable than expected.What type of risk is Allison most concerned with?

The investment pyramid describes four levels of investment.State the name of each level and provide examples of investments at each level.

Which one of the following investments offers the least liquidity?

The rate of return on an investment has no effect on an investment program.

Which newspaper is one of the most readily available sources of information for the average investor?

If you invest $2,000 in a stock and the stock pays you $35 in dividends each year and is worth $2,150 at the end of one year,then what is your rate of return?

Which of the following is not true of mutual funds?

The amount of time that your investments have to work for you is an important factor when establishing your long-term investment program.

Which one of the following investments would provide the most predictable source of income?

Gina Davidson has received $35,000 in a divorce settlement and is trying to decide how to invest it.She has looked at stocks but is uncertain as some stocks have lost a lot of value for their owners recently.What aspect of investing is she most concerned about?

Forty years ago,you began investing $2,000 a year.Because your investments earned an average of 2 percent a year,your investment portfolio has a current dollar value of $120,804.How much did you earn on your investments over the 40-year period of time?

The average credit card debt for a graduating college student is over:

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 these investments pools the money from many investors,hires a professional money manager to manage those funds,and offers diversification to investors?

Which one of the following statements is true?

Matt Jackson is single and 28 years old.He has just graduated from college with a master's degree and obtained a job making $27,500 a year.Which one of the following investments would you recommend for his long-term investment program?

The advantages of asset allocation include all of the following except:

Chris O'Donnell is thinking about investing in an investment that is high-risk in the hope of earning a relatively large profit in a short amount of time.Which investment is he most likely considering?

Potential investors should not wait until their financial affairs are in good shape before starting an investment program.

Allison Peavy wants to invest but is worried about risk.In particular,she is worried that bad management and increased competition in the wireless phone market will make these companies less profitable than expected.What type of risk is Allison most concerned with?

The investment pyramid describes four levels of investment.State the name of each level and provide examples of investments at each level.

Which one of the following investments offers the least liquidity?

The rate of return on an investment has no effect on an investment program.

Which newspaper is one of the most readily available sources of information for the average investor?

If you invest $2,000 in a stock and the stock pays you $35 in dividends each year and is worth $2,150 at the end of one year,then what is your rate of return?

Which of the following is not true of mutual funds?

The amount of time that your investments have to work for you is an important factor when establishing your long-term investment program.

Which one of the following investments would provide the most predictable source of income?

Gina Davidson has received $35,000 in a divorce settlement and is trying to decide how to invest it.She has looked at stocks but is uncertain as some stocks have lost a lot of value for their owners recently.What aspect of investing is she most concerned about?

Forty years ago,you began investing $2,000 a year.Because your investments earned an average of 2 percent a year,your investment portfolio has a current dollar value of $120,804.How much did you earn on your investments over the 40-year period of time?

The average credit card debt for a graduating college student is over:

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