Question 1

The herd behavior effect involves the emotions of fearing regret and seeking pride, resulting in selling winners too soon and keeping losers too long.

Accepted Answer

A) True 
 B)False

Question 2

Long term capital gains are taxed at ________ percent.

Accepted Answer

A)  8 
B)  10 
C)  15 
D)  25 
E)  40 
A)  8 
B)  10 
C)  15 
D)  25 
E)  40

Question 3

If you bought a 20-year bond issued by the government, with a par value of $1,000 and an interest rate of 8%. At maturity you will be returned the principal of ________.

Accepted Answer

A)  $80 
B)  $500 
C)  $800 
D)  $1,000 
E)  $1,600 
A)  $80 
B)  $500 
C)  $800 
D)  $1,000 
E)  $1,600

Question 4

Investing prior to age 54 is a time of ________ by investing the majority of one's savings into ________.

Accepted Answer

A)  wealth preservation; conservative funds 
B)  wealth preservation; preferred stocks 
C)  wealth accumulation; common stocks 
D)  wealth accumulation; bonds 
E)  wealth dispersal; common and preferred stocks 
A)  wealth preservation; conservative funds 
B)  wealth preservation; preferred stocks 
C)  wealth accumulation; common stocks 
D)  wealth accumulation; bonds 
E)  wealth dispersal; common and preferred stocks

Question 5

Principle #2: the time value of money tells us that time is our greatest ally. This being so, the most important and most difficult step is making the commitment to get started. Tell how to find the money and get started with Principle #15: just do it.

Accepted Answer

Pay yourself first instead of last; that

Question 6

You can make investments on a ________ basis, which means that not only does your investment grow free of taxes, but the money you invest isn't taxed until you liquidate your investment

Accepted Answer

A)  tax-eliminated 
B)  progressive tax 
C)  tax-deferred 
D)  asset management 
A)  tax-eliminated 
B)  progressive tax 
C)  tax-deferred 
D)  asset management

Question 7

If you are too conservative with your investments, they may not keep up with inflation.

Accepted Answer

A) True 
 B)False

Question 8

Some types of investments expose you to multiple sources of risk.

Accepted Answer

A) True 
 B)False

Question 9

Compare and contrast lending and ownership investments.

Accepted Answer

You actually lend someone your money in

Question 10

The real rate of return can never be a negative number.

Accepted Answer

A) True 
 B)False

Question 11

You recently purchased a stock for $25. It is now worth $35, and it paid a $5 dividend during the time you held it. Your rate of return on this stock is closest to which of the following?

Accepted Answer

A)  60% 
B)  -20% 
C)  43% 
D)  40% 
A)  60% 
B)  -20% 
C)  43% 
D)  40%

Question 12

Particularly, during election years, consumers should make themselves aware of the risk resulting from unanticipated changes in the tax or legal environment. This is classified as political and regulatory risk.

Accepted Answer

A) True 
 B)False

Question 13

Which of the following investors will potentially receive dividends on their investments?

Accepted Answer

A)  Bondholders 
B)  Stockholders 
C)  Debt holders 
D)  Derivative holders 
E)  Both B and D are correct. 
A)  Bondholders 
B)  Stockholders 
C)  Debt holders 
D)  Derivative holders 
E)  Both B and D are correct.

Question 14

Investing in bonds is generally less risky than investing in stocks.

Accepted Answer

A) True 
 B)False

Question 15

Cretia Robritti discovered that the purpose of asset allocation is to ensure that the investor is ________, generally with holdings in several different ________ of investments.

Accepted Answer

A)  protected; denominations 
B)  well diversified; amounts 
C)  well diversified; classes 
D)  evenly distributed; classes 
E)  evenly distributed; amounts 
A)  protected; denominations 
B)  well diversified; amounts 
C)  well diversified; classes 
D)  evenly distributed; classes 
E)  evenly distributed; amounts

Question 16

Barney Hopkins is the financial manager for Amax Corporation. He knows that ________ risk deals with good or bad management decisions and ________ is associated with his company's use of debt.

Accepted Answer

A)  market; business 
B)  market; financial 
C)  business; interest rate 
D)  business; financial 
E)  financial; business 
A)  market; business 
B)  market; financial 
C)  business; interest rate 
D)  business; financial 
E)  financial; business

Question 17

The nominal rate of return minus the inflation rate is called the ________.

Accepted Answer

A)  stated rate of return 
B)  standard rate of return 
C)  real rate of return 
D)  Fisher effect 
E)  none of the above 
A)  stated rate of return 
B)  standard rate of return 
C)  real rate of return 
D)  Fisher effect 
E)  none of the above

Question 18

Anthony Hopkins wants to start investing and desires to consistently beat the market. What will you tell him?

Accepted Answer

A)  It can be done regularly by a skilled investor. 
B)  It is very tough to do so. 
C)  Half the time you should outperform the market. 
D)  Half the time you should underperform the market. 
E)  All of the above except A 
A)  It can be done regularly by a skilled investor. 
B)  It is very tough to do so. 
C)  Half the time you should outperform the market. 
D)  Half the time you should underperform the market. 
E)  All of the above except A

Question 19

You recently purchased 100 shares of stock at $15 per share. The stock is now worth $20 per share, and it paid a $2 dividend during the time you held it. Your rate of return on this stock is closest to which of the following?

Accepted Answer

A)  -20% 
B)  33% 
C)  35% 
D)  47% 
A)  -20% 
B)  33% 
C)  35% 
D)  47%

Question 20

Lavon has his money invested into an asset that has averaged the following returns the last three years: +22%, -8%, +13%. Most likely what type of asset is he invested in?

Accepted Answer

A)  Corporate bonds 
B)  Income producing real estate 
C)  Gold coins 
D)  Common stock 
A)  Corporate bonds 
B)  Income producing real estate 
C)  Gold coins 
D)  Common stock

The herd behavior effect involves the emotions of fearing regret and seeking pride, resulting in selling winners too soon and keeping losers too long.

Long term capital gains are taxed at ________ percent.

If you bought a 20-year bond issued by the government, with a par value of $1,000 and an interest rate of 8%. At maturity you will be returned the principal of ________.

Investing prior to age 54 is a time of by investing the majority of one's savings into .

Principle #2: the time value of money tells us that time is our greatest ally. This being so, the most important and most difficult step is making the commitment to get started. Tell how to find the money and get started with Principle #15: just do it.

You can make investments on a ________ basis, which means that not only does your investment grow free of taxes, but the money you invest isn't taxed until you liquidate your investment

If you are too conservative with your investments, they may not keep up with inflation.

Some types of investments expose you to multiple sources of risk.

Compare and contrast lending and ownership investments.

The real rate of return can never be a negative number.

You recently purchased a stock for $25. It is now worth $35, and it paid a $5 dividend during the time you held it. Your rate of return on this stock is closest to which of the following?

Particularly, during election years, consumers should make themselves aware of the risk resulting from unanticipated changes in the tax or legal environment. This is classified as political and regulatory risk.

Which of the following investors will potentially receive dividends on their investments?

Investing in bonds is generally less risky than investing in stocks.

Cretia Robritti discovered that the purpose of asset allocation is to ensure that the investor is , generally with holdings in several different of investments.

Barney Hopkins is the financial manager for Amax Corporation. He knows that risk deals with good or bad management decisions and is associated with his company's use of debt.

The nominal rate of return minus the inflation rate is called the ________.

Anthony Hopkins wants to start investing and desires to consistently beat the market. What will you tell him?

You recently purchased 100 shares of stock at $15 per share. The stock is now worth $20 per share, and it paid a $2 dividend during the time you held it. Your rate of return on this stock is closest to which of the following?

Lavon has his money invested into an asset that has averaged the following returns the last three years: +22%, -8%, +13%. Most likely what type of asset is he invested in?

The Financial Planning Process

Measuring Your Financial Health and Making a Plan

Understanding and Appreciating the Time Value of Money

Tax Planning and Strategies

Cash or Liquid Asset Management

Using Credit Cards: The Role of Open Credit

Using Consumer Loans: The Role of Planned Borrowing

The Home and Automobile Decision

Life and Health Insurance

Property and Liability Insurance

Securities Markets

Investing in Stocks

Investing in Bonds and Other Alternatives

Mutual Funds: An Easy Way to Diversify

Retirement Planning

Estate Planning: Saving Your Heirs Money and Headaches

Financial Life Events Fitting the Pieces Together

Filters

Exam 11: Investment Basics

The herd behavior effect involves the emotions of fearing regret and seeking pride, resulting in selling winners too soon and keeping losers too long.

Long term capital gains are taxed at ________ percent.

If you bought a 20-year bond issued by the government, with a par value of $1,000 and an interest rate of 8%. At maturity you will be returned the principal of ________.

Investing prior to age 54 is a time of ________ by investing the majority of one's savings into ________.

Principle #2: the time value of money tells us that time is our greatest ally. This being so, the most important and most difficult step is making the commitment to get started. Tell how to find the money and get started with Principle #15: just do it.

You can make investments on a ________ basis, which means that not only does your investment grow free of taxes, but the money you invest isn't taxed until you liquidate your investment

If you are too conservative with your investments, they may not keep up with inflation.

Some types of investments expose you to multiple sources of risk.

Compare and contrast lending and ownership investments.

The real rate of return can never be a negative number.

You recently purchased a stock for $25. It is now worth $35, and it paid a $5 dividend during the time you held it. Your rate of return on this stock is closest to which of the following?

Particularly, during election years, consumers should make themselves aware of the risk resulting from unanticipated changes in the tax or legal environment. This is classified as political and regulatory risk.

Which of the following investors will potentially receive dividends on their investments?

Investing in bonds is generally less risky than investing in stocks.

Cretia Robritti discovered that the purpose of asset allocation is to ensure that the investor is ________, generally with holdings in several different ________ of investments.

Barney Hopkins is the financial manager for Amax Corporation. He knows that ________ risk deals with good or bad management decisions and ________ is associated with his company's use of debt.

The nominal rate of return minus the inflation rate is called the ________.

Anthony Hopkins wants to start investing and desires to consistently beat the market. What will you tell him?

You recently purchased 100 shares of stock at $15 per share. The stock is now worth $20 per share, and it paid a $2 dividend during the time you held it. Your rate of return on this stock is closest to which of the following?

Lavon has his money invested into an asset that has averaged the following returns the last three years: +22%, -8%, +13%. Most likely what type of asset is he invested in?

The Financial Planning Process

Measuring Your Financial Health and Making a Plan

Understanding and Appreciating the Time Value of Money

Tax Planning and Strategies

Cash or Liquid Asset Management

Using Credit Cards: The Role of Open Credit

Using Consumer Loans: The Role of Planned Borrowing

The Home and Automobile Decision

Life and Health Insurance

Property and Liability Insurance

Securities Markets

Investing in Stocks

Investing in Bonds and Other Alternatives

Mutual Funds: An Easy Way to Diversify

Retirement Planning

Estate Planning: Saving Your Heirs Money and Headaches

Financial Life Events Fitting the Pieces Together

Filters

Investing prior to age 54 is a time of by investing the majority of one's savings into .

Cretia Robritti discovered that the purpose of asset allocation is to ensure that the investor is , generally with holdings in several different of investments.

Barney Hopkins is the financial manager for Amax Corporation. He knows that risk deals with good or bad management decisions and is associated with his company's use of debt.