Question 1

Use of leverage will increase the rate of return on a capital gain and also will increase the rate of loss on a capital loss.

Accepted Answer

A) True 
 B)False

Question 2

Your goals and the time it will take to reach them dictate the investment strategies you follow and the investment alternatives you choose.

Accepted Answer

A) True 
 B)False

Question 3

The first step in the investment planning process is to write down your investment philosophy.

Accepted Answer

A) True 
 B)False

Question 4

____ would be a reasonable investment for funds that could be invested less than two years.

Accepted Answer

A) Stocks paying high dividends 
B) Short-term bonds 
C) Money market mutual funds 
D) Balanced mutual funds 
A) Stocks paying high dividends 
B) Short-term bonds 
C) Money market mutual funds 
D) Balanced mutual funds

Question 5

Selling shares of stock for more than you originally paid is called

Accepted Answer

A) modern portfolio theory. 
B) leverage. 
C) current income. 
D) capital gain. 
A) modern portfolio theory. 
B) leverage. 
C) current income. 
D) capital gain.

Question 6

A limited management account allows workers saving for retirement through an employer-based plan to have the benefits of asset allocation without doing the reallocations themselves.

Accepted Answer

A) True 
 B)False

Question 7

Systemic risk is easier to avoid than random risk.

Accepted Answer

A) True 
 B)False

Question 8

Market efficiency reflects the speed at which new information is reflected in market prices for investments.

Accepted Answer

A) True 
 B)False

Question 9

The asset allocation strategy is a form of leverage.

Accepted Answer

A) True 
 B)False

Question 10

Being risk averse means that you focus primarily on preservation of capital with little desire for current income from your investments.

Accepted Answer

A) True 
 B)False

Question 11

Bonds are shares of ownership in a corporation.

Accepted Answer

A) True 
 B)False

Question 12

____ is (are) the portion of a company's profits that the firm pays out to its shareholders.

Accepted Answer

A) Rent 
B) Dividends 
C) Interest 
D) Net income 
A) Rent 
B) Dividends 
C) Interest 
D) Net income

Question 13

Short-term investing requires more diligent monitoring than long-term investing.

Accepted Answer

A) True 
 B)False

Question 14

Dollar-cost averaging requires that you continue to invest if the longer-term prospects suggest an eventual increase in price

Accepted Answer

A) True 
 B)False

Question 15

Conservative investors are fairly comfortable during rising and falling market conditions.

Accepted Answer

A) True 
 B)False

Question 16

Financial risk relates to the possibility that the investment

Accepted Answer

A) will fail to pay a return to the investor. 
B) is subject to a sharp price changes. 
C) will fall in value. 
D) is illiquid. 
A) will fail to pay a return to the investor. 
B) is subject to a sharp price changes. 
C) will fall in value. 
D) is illiquid.

Question 17

Business-cycle and market-volatility risks are essentially the same..

Accepted Answer

A) True 
 B)False

Question 18

Gary purchased 250 shares of PAC stock for $37 per share and sold this same stock one year later for $44 per share.He paid commissions of $15 when he purchased the stock and $10 when he sold the stock.Dividends of $1.50 per share were paid during the year.The total rate of return on this investment was

Accepted Answer

A) 22.98 percent. 
B) 22.70 percent. 
C) 18.92 percent. 
D) 19.32 percent. 
A) 22.98 percent. 
B) 22.70 percent. 
C) 18.92 percent. 
D) 19.32 percent.

Question 19

Attempting to invest based on predictions of short-term fluctuations in an investment market is called

Accepted Answer

A) buy-and-hold investing. 
B) market timing. 
C) market seeking. 
D) passive investing. 
A) buy-and-hold investing. 
B) market timing. 
C) market seeking. 
D) passive investing.

Question 20

Investors who need a moderate amount of current income from their investments while also seeking preservation of capital are said to be risk

Accepted Answer

A) neutral. 
B) seekers. 
C) averse. 
D) followers. 
A) neutral. 
B) seekers. 
C) averse. 
D) followers.

Use of leverage will increase the rate of return on a capital gain and also will increase the rate of loss on a capital loss.

Your goals and the time it will take to reach them dictate the investment strategies you follow and the investment alternatives you choose.

The first step in the investment planning process is to write down your investment philosophy.

____ would be a reasonable investment for funds that could be invested less than two years.

Selling shares of stock for more than you originally paid is called

A limited management account allows workers saving for retirement through an employer-based plan to have the benefits of asset allocation without doing the reallocations themselves.

Systemic risk is easier to avoid than random risk.

Market efficiency reflects the speed at which new information is reflected in market prices for investments.

The asset allocation strategy is a form of leverage.

Being risk averse means that you focus primarily on preservation of capital with little desire for current income from your investments.

Bonds are shares of ownership in a corporation.

____ is (are) the portion of a company's profits that the firm pays out to its shareholders.

Short-term investing requires more diligent monitoring than long-term investing.

Dollar-cost averaging requires that you continue to invest if the longer-term prospects suggest an eventual increase in price

Conservative investors are fairly comfortable during rising and falling market conditions.

Financial risk relates to the possibility that the investment

Business-cycle and market-volatility risks are essentially the same..

Attempting to invest based on predictions of short-term fluctuations in an investment market is called

Investors who need a moderate amount of current income from their investments while also seeking preservation of capital are said to be risk

Understanding Personal Finance

Career Planning

Financial Statements,tools,and Budgets

Managing Income Taxes

Managing Checking and Savings Accounts

Building and Maintaining Good Credit

Credit Cards and Consumer Loans

Vehicles and Other Major Purchases

Obtaining Affordable Housing

Managing Property and Liability Risk

Managing Health Expenses

Life Insurance Planning

Investing in Stocks and Bonds

Mutual Funds and Exchange Traded Funds

Real Estate and High-Risk Investments

Retirement and Estate Planning

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Exam 13: Investment Fundamentals

Use of leverage will increase the rate of return on a capital gain and also will increase the rate of loss on a capital loss.

Your goals and the time it will take to reach them dictate the investment strategies you follow and the investment alternatives you choose.

The first step in the investment planning process is to write down your investment philosophy.

____ would be a reasonable investment for funds that could be invested less than two years.

Selling shares of stock for more than you originally paid is called

A limited management account allows workers saving for retirement through an employer-based plan to have the benefits of asset allocation without doing the reallocations themselves.

Systemic risk is easier to avoid than random risk.

Market efficiency reflects the speed at which new information is reflected in market prices for investments.

The asset allocation strategy is a form of leverage.

Being risk averse means that you focus primarily on preservation of capital with little desire for current income from your investments.

Bonds are shares of ownership in a corporation.

____ is (are) the portion of a company's profits that the firm pays out to its shareholders.

Short-term investing requires more diligent monitoring than long-term investing.

Dollar-cost averaging requires that you continue to invest if the longer-term prospects suggest an eventual increase in price

Conservative investors are fairly comfortable during rising and falling market conditions.

Financial risk relates to the possibility that the investment

Business-cycle and market-volatility risks are essentially the same..

Attempting to invest based on predictions of short-term fluctuations in an investment market is called

Investors who need a moderate amount of current income from their investments while also seeking preservation of capital are said to be risk

Understanding Personal Finance

Career Planning

Financial Statements,tools,and Budgets

Managing Income Taxes

Managing Checking and Savings Accounts

Building and Maintaining Good Credit

Credit Cards and Consumer Loans

Vehicles and Other Major Purchases

Obtaining Affordable Housing

Managing Property and Liability Risk

Managing Health Expenses

Life Insurance Planning

Investing in Stocks and Bonds

Mutual Funds and Exchange Traded Funds

Real Estate and High-Risk Investments

Retirement and Estate Planning

Filters