Question 1

The return-risk relationship means

Accepted Answer

A) the ideal investment has high return and low risk. 
B) the downside risk is all that really matters to investors. 
C) the higher the return expectation of an investment,the greater the uncertainty. 
D) a diversified mutual fund will have low risk. 
A) the ideal investment has high return and low risk. 
B) the downside risk is all that really matters to investors. 
C) the higher the return expectation of an investment,the greater the uncertainty. 
D) a diversified mutual fund will have low risk. C

Question 2

Which of the following is True about growth stocks?

Accepted Answer

A) They are more established companies. 
B) They mainly produce income via capital gains. 
C) They pay high dividends. 
D) They are the opposite of value stocks. 
A) They are more established companies. 
B) They mainly produce income via capital gains. 
C) They pay high dividends. 
D) They are the opposite of value stocks. B

Question 3

Which of the following is good investment advice?

Accepted Answer

A) Set high goals and expectations for your investments even if they are unrealistic. 
B) Investing in mutual funds is an effective way to diversify if you have $200 per month to invest. 
C) If you are not getting the returns you need on your savings,select a more risky investment. 
D) If you own a stock that has dropped 50 percent in value,purchase more to average your price down. 
A) Set high goals and expectations for your investments even if they are unrealistic. 
B) Investing in mutual funds is an effective way to diversify if you have $200 per month to invest. 
C) If you are not getting the returns you need on your savings,select a more risky investment. 
D) If you own a stock that has dropped 50 percent in value,purchase more to average your price down. B

Question 4

Given the bank rate of 3.5 percent,and a corporate bond that will pay 10 percent.What is the risk premium?

Accepted Answer

A) 13.5 percent 
B) 6)5 percent 
C) 7)5 percent 
D) 0 percent 
A) 13.5 percent 
B) 6)5 percent 
C) 7)5 percent 
D) 0 percent

Question 5

Low-risk bonds tend to offer higher interest payments.

Accepted Answer

A) True 
 B)False

Question 6

Corporate bonds

Accepted Answer

A) offer a return to investors in the form of interest payments. 
B) maintain their value even in periods of changing interest rates. 
C) appreciate in value as the maturity date nears. 
D) lose value as the maturity date nears. 
A) offer a return to investors in the form of interest payments. 
B) maintain their value even in periods of changing interest rates. 
C) appreciate in value as the maturity date nears. 
D) lose value as the maturity date nears.

Question 7

Your investment portfolio matches your risk profile perfectly but you are not meeting your investment goals.You should remedy this by

Accepted Answer

A) increasing the high-risk portion of the portfolio to achieve higher returns. 
B) cutting expenses to increase savings and stay with the same asset allocation. 
C) reviewing your investment goals to see if they are realistic and make adjustments. 
D) selling all of the investment assets to reinvest in low risk investments. 
A) increasing the high-risk portion of the portfolio to achieve higher returns. 
B) cutting expenses to increase savings and stay with the same asset allocation. 
C) reviewing your investment goals to see if they are realistic and make adjustments. 
D) selling all of the investment assets to reinvest in low risk investments.

Question 8

If the market value for ABC Ltd.is $70 000 000 and its number of shares outstanding is ?35 555 555,the value of stock per share is

Accepted Answer

A) $19.69. 
B) $1.969. 
C) $196.90. 
D) Insufficient information to answer this question 
A) $19.69. 
B) $1.969. 
C) $196.90. 
D) Insufficient information to answer this question

Question 9

Which of the following is True about dividends?

Accepted Answer

A) Dividends are not based on earnings. 
B) All large companies pay dividends. 
C) Dividends are usually around five percent of the stock price. 
D) Dividends are paid by older,established companies. 
A) Dividends are not based on earnings. 
B) All large companies pay dividends. 
C) Dividends are usually around five percent of the stock price. 
D) Dividends are paid by older,established companies.

Question 10

You have $10 000 to invest now and can add $550 a month,have a moderate risk profile,and would like to set these funds aside for retirement in 20 years.Your most appropriate option would be to

Accepted Answer

A) put the money in a money market savings account. 
B) buy one-year GICs. 
C) invest in small cap mutual funds. 
D) invest in mutual funds managed by the asset allocation method. 
A) put the money in a money market savings account. 
B) buy one-year GICs. 
C) invest in small cap mutual funds. 
D) invest in mutual funds managed by the asset allocation method.

Question 11

Bonds are certificates representing partial ownership of a firm.

Accepted Answer

A) True 
 B)False

Question 12

Which portfolio provides the advantage of asset allocation?

Accepted Answer

A) A portfolio invested in stocks of several different countries to maximize return with less risk 
B) A portfolio invested in bonds and stocks in equal amounts to maximize return with less risk 
C) A portfolio invested in a variety of assets to maximize return with less risk 
D) A fully diversified equity portfolio eliminating unsystematic risk 
A) A portfolio invested in stocks of several different countries to maximize return with less risk 
B) A portfolio invested in bonds and stocks in equal amounts to maximize return with less risk 
C) A portfolio invested in a variety of assets to maximize return with less risk 
D) A fully diversified equity portfolio eliminating unsystematic risk

Question 13

To measure an investment's risk,which of the following would you use?

Accepted Answer

A) Time value of money 
B) Range of returns on the entire market 
C) Standard deviation of returns 
D) Standard deviation of prices 
A) Time value of money 
B) Range of returns on the entire market 
C) Standard deviation of returns 
D) Standard deviation of prices

Question 14

The returns on bond investments may come from

Accepted Answer

A) fixed coupon interest only. 
B) fixed coupon interest and bond price appreciation. 
C) fixed coupon dividend and bond price appreciation. 
D) bond price appreciation only. 
A) fixed coupon interest only. 
B) fixed coupon interest and bond price appreciation. 
C) fixed coupon dividend and bond price appreciation. 
D) bond price appreciation only.

Question 15

Institutional investors

Accepted Answer

A) are responsible for most of the trading in financial markets. 
B) focus most of their investment decisions on less than one year. 
C) primarily select stocks using technical analysis. 
D) invest primarily in stocks rather than bonds. 
A) are responsible for most of the trading in financial markets. 
B) focus most of their investment decisions on less than one year. 
C) primarily select stocks using technical analysis. 
D) invest primarily in stocks rather than bonds.

Question 16

Growth stocks are likely to pay high dividends.

Accepted Answer

A) True 
 B)False

Question 17

Savvy investors can find investments that generate high rates of return with low levels of risk.

Accepted Answer

A) True 
 B)False

Question 18

For your retirement you want to have enough funds in your RRSPs to provide an income stream of $22 000 for 30 years.How much money would you need to have accumulated if your RRSPs averaged a real return of four percent per year? (Round to the nearest thousand)

Accepted Answer

A) $384 000 
B) $627 000 
C) $660 000 
D) $380 000 
A) $384 000 
B) $627 000 
C) $660 000 
D) $380 000

Question 19

Compared with common stock,preferred stock values

Accepted Answer

A) are more variable. 
B) are less variable. 
C) are lower. 
D) are higher. 
A) are more variable. 
B) are less variable. 
C) are lower. 
D) are higher.

Question 20

You want to save $10 000 toward the down payment on a house in five years.If you can earn 8 percent (compounded monthly),approximately how much should you save each month to reach this short-term goal?

Accepted Answer

A) $142 
B) $136 
C) $167 
D) $131 
A) $142 
B) $136 
C) $167 
D) $131

The return-risk relationship means

Which of the following is True about growth stocks?

Which of the following is good investment advice?

Given the bank rate of 3.5 percent,and a corporate bond that will pay 10 percent.What is the risk premium?

Low-risk bonds tend to offer higher interest payments.

Corporate bonds

Your investment portfolio matches your risk profile perfectly but you are not meeting your investment goals.You should remedy this by

If the market value for ABC Ltd.is $70 000 000 and its number of shares outstanding is ?35 555 555,the value of stock per share is

Which of the following is True about dividends?

You have $10 000 to invest now and can add $550 a month,have a moderate risk profile,and would like to set these funds aside for retirement in 20 years.Your most appropriate option would be to

Bonds are certificates representing partial ownership of a firm.

Which portfolio provides the advantage of asset allocation?

To measure an investment's risk,which of the following would you use?

The returns on bond investments may come from

Institutional investors

Growth stocks are likely to pay high dividends.

Savvy investors can find investments that generate high rates of return with low levels of risk.

For your retirement you want to have enough funds in your RRSPs to provide an income stream of $22 000 for 30 years.How much money would you need to have accumulated if your RRSPs averaged a real return of four percent per year? (Round to the nearest thousand)

Compared with common stock,preferred stock values

You want to save $10 000 toward the down payment on a house in five years.If you can earn 8 percent (compounded monthly),approximately how much should you save each month to reach this short-term goal?

Overview of a Financial Plan

Tools for Financial Planning - Applying Time Value Concepts

Tools for Financial Planning - Planning with Personal Financial Statements

Tools for Financial Planning - Using Tax Concepts for Planning

Managing Your Financial Resources - Banking Services and Managing Your Money

Managing Your Financial Resources - Assessing, Managing, and Securing Your Credit

Managing Your Financial Resources - Purchasing and Financing a Home

Protecting Your Wealth - Auto and Homeowner's Insurance

Protecting Your Wealth - Health and Life Insurance

Personal Investing - Investing in Stocks

Personal Investing - Investing in Bonds

Personal Investing - Investing in Mutual Funds

Retirement and Estate Planning - Retirement Planning

Retirement and Estate Planning - Estate Planning

Synthesis of Financial Planning - Integrating the Components of a Financial Plan

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Exam 10: Personal Investing - Investing Fundamentals

The return-risk relationship means

Which of the following is True about growth stocks?

Which of the following is good investment advice?

Given the bank rate of 3.5 percent,and a corporate bond that will pay 10 percent.What is the risk premium?

Low-risk bonds tend to offer higher interest payments.

Corporate bonds

Your investment portfolio matches your risk profile perfectly but you are not meeting your investment goals.You should remedy this by

If the market value for ABC Ltd.is $70 000 000 and its number of shares outstanding is ?35 555 555,the value of stock per share is

Which of the following is True about dividends?

You have $10 000 to invest now and can add $550 a month,have a moderate risk profile,and would like to set these funds aside for retirement in 20 years.Your most appropriate option would be to

Bonds are certificates representing partial ownership of a firm.

Which portfolio provides the advantage of asset allocation?

To measure an investment's risk,which of the following would you use?

The returns on bond investments may come from

Institutional investors

Growth stocks are likely to pay high dividends.

Savvy investors can find investments that generate high rates of return with low levels of risk.

For your retirement you want to have enough funds in your RRSPs to provide an income stream of $22 000 for 30 years.How much money would you need to have accumulated if your RRSPs averaged a real return of four percent per year? (Round to the nearest thousand)

Compared with common stock,preferred stock values

You want to save $10 000 toward the down payment on a house in five years.If you can earn 8 percent (compounded monthly),approximately how much should you save each month to reach this short-term goal?

Overview of a Financial Plan

Tools for Financial Planning - Applying Time Value Concepts

Tools for Financial Planning - Planning with Personal Financial Statements

Tools for Financial Planning - Using Tax Concepts for Planning

Managing Your Financial Resources - Banking Services and Managing Your Money

Managing Your Financial Resources - Assessing, Managing, and Securing Your Credit

Managing Your Financial Resources - Purchasing and Financing a Home

Protecting Your Wealth - Auto and Homeowner's Insurance

Protecting Your Wealth - Health and Life Insurance

Personal Investing - Investing in Stocks

Personal Investing - Investing in Bonds

Personal Investing - Investing in Mutual Funds

Retirement and Estate Planning - Retirement Planning

Retirement and Estate Planning - Estate Planning

Synthesis of Financial Planning - Integrating the Components of a Financial Plan

Filters