Question 1

A good investment program replaces one's savings program.

Accepted Answer

A) True 
 B)False

Question 2

When comparing similar investments,your objective is to earn the best after-tax return.

Accepted Answer

A) True 
 B)False

Question 3

Using borrowed funds to make an investment is called

Accepted Answer

A) diversification. 
B) leverage. 
C) liquidity. 
D) hedging. 
A) diversification. 
B) leverage. 
C) liquidity. 
D) hedging.

Question 4

Investment risk is speculative risk rather than pure risk.

Accepted Answer

A) True 
 B)False

Question 5

Dividends are distributions of profits an investor receives for depositing funds in a bank or savings and loan association.

Accepted Answer

A) True 
 B)False

Question 6

Portfolio diversification is the practice of selecting a collection of investments that have dissimilar risk-return characteristics.

Accepted Answer

A) True 
 B)False

Question 7

____ investors consider investments in new companies,collectibles,and limited real estate partnerships.

Accepted Answer

A) Ultraconservative 
B) Conservative 
C) Moderate 
D) Aggressive 
A) Ultraconservative 
B) Conservative 
C) Moderate 
D) Aggressive

Question 8

If one is in the 25 percent marginal tax bracket,he or she will have an after-tax income of ____ from an investment that pays $1,500 in taxable income.

Accepted Answer

A) $1,500 
B) $1,125 
C) $960 
D) $420 
A) $1,500 
B) $1,125 
C) $960 
D) $420

Question 9

Typically the highest commissions are charged on investments in

Accepted Answer

A) stocks. 
B) bonds. 
C) collectibles. 
D) real estate. 
A) stocks. 
B) bonds. 
C) collectibles. 
D) real estate.

Question 10

____ risk represents the uncertainty that the yield on an investment will deviate from what is expected.

Accepted Answer

A) Financial 
B) Premium 
C) Investment 
D) Market 
A) Financial 
B) Premium 
C) Investment 
D) Market

Question 11

Four strategies of portfolio management for long-term investors are portfolio diversification,asset allocation,buy-and-hold,and

Accepted Answer

A) dollar-cost averaging. 
B) real return on investment. 
C) market risk. 
D) leverage. 
A) dollar-cost averaging. 
B) real return on investment. 
C) market risk. 
D) leverage.

Question 12

An active investor could be described as a long-term investor who makes regular investments in securities,such as mutual funds,and his or her assets are rarely sold for short-term profits.

Accepted Answer

A) True 
 B)False

Question 13

The investment strategy where an investor buys a fixed dollar amount of stocks or mutual funds regularly over a long period of time is called

Accepted Answer

A) dollar-cost averaging. 
B) asset allocation. 
C) portfolio diversification. 
D) business-cycle timing. 
A) dollar-cost averaging. 
B) asset allocation. 
C) portfolio diversification. 
D) business-cycle timing.

Question 14

What is the average share price for the dollar-cost averaging strategy shown below?
​

Accepted Answer

A) $34.20 
B) $37.14 
C) $33.66 
D) $36.55 
A) $34.20 
B) $37.14 
C) $33.66 
D) $36.55

Question 15

Savings is the accumulation of excess funds by intentionally spending less than you earn.

Accepted Answer

A) True 
 B)False

Question 16

When choosing among investment alternatives you want to focus on their

Accepted Answer

A) current income. 
B) capital gains. 
C) interest. 
D) yields. 
A) current income. 
B) capital gains. 
C) interest. 
D) yields.

Question 17

____ are located at the base of the investment risk pyramid.

Accepted Answer

A) Blue-chip stocks 
B) High-quality corporate bonds 
C) Growth and income mutual funds 
D) Treasury securities 
A) Blue-chip stocks 
B) High-quality corporate bonds 
C) Growth and income mutual funds 
D) Treasury securities

Question 18

Long-term investors seek growth in the value of their investments that equals the rate of inflation.

Accepted Answer

A) True 
 B)False

Question 19

The first step in the investment planning process is to study available investment alternatives and learn as much as you can about the ones you like.

Accepted Answer

A) True 
 B)False

Question 20

Investing goes beyond saving in that it

Accepted Answer

A) requires that less be spent than you earn. 
B) involves increased risk. 
C) ignores current income. 
D) is something only few people should do. 
A) requires that less be spent than you earn. 
B) involves increased risk. 
C) ignores current income. 
D) is something only few people should do.

A good investment program replaces one's savings program.

When comparing similar investments,your objective is to earn the best after-tax return.

Using borrowed funds to make an investment is called

Investment risk is speculative risk rather than pure risk.

Dividends are distributions of profits an investor receives for depositing funds in a bank or savings and loan association.

Portfolio diversification is the practice of selecting a collection of investments that have dissimilar risk-return characteristics.

____ investors consider investments in new companies,collectibles,and limited real estate partnerships.

If one is in the 25 percent marginal tax bracket,he or she will have an after-tax income of ____ from an investment that pays $1,500 in taxable income.

Typically the highest commissions are charged on investments in

____ risk represents the uncertainty that the yield on an investment will deviate from what is expected.

Four strategies of portfolio management for long-term investors are portfolio diversification,asset allocation,buy-and-hold,and

An active investor could be described as a long-term investor who makes regular investments in securities,such as mutual funds,and his or her assets are rarely sold for short-term profits.

The investment strategy where an investor buys a fixed dollar amount of stocks or mutual funds regularly over a long period of time is called

What is the average share price for the dollar-cost averaging strategy shown below?

Savings is the accumulation of excess funds by intentionally spending less than you earn.

When choosing among investment alternatives you want to focus on their

____ are located at the base of the investment risk pyramid.

Long-term investors seek growth in the value of their investments that equals the rate of inflation.

The first step in the investment planning process is to study available investment alternatives and learn as much as you can about the ones you like.

Investing goes beyond saving in that it

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

Exam 13: Investment Fundamentals

A good investment program replaces one's savings program.

When comparing similar investments,your objective is to earn the best after-tax return.

Using borrowed funds to make an investment is called

Investment risk is speculative risk rather than pure risk.

Dividends are distributions of profits an investor receives for depositing funds in a bank or savings and loan association.

Portfolio diversification is the practice of selecting a collection of investments that have dissimilar risk-return characteristics.

____ investors consider investments in new companies,collectibles,and limited real estate partnerships.

If one is in the 25 percent marginal tax bracket,he or she will have an after-tax income of ____ from an investment that pays $1,500 in taxable income.

Typically the highest commissions are charged on investments in

____ risk represents the uncertainty that the yield on an investment will deviate from what is expected.

Four strategies of portfolio management for long-term investors are portfolio diversification,asset allocation,buy-and-hold,and

An active investor could be described as a long-term investor who makes regular investments in securities,such as mutual funds,and his or her assets are rarely sold for short-term profits.

The investment strategy where an investor buys a fixed dollar amount of stocks or mutual funds regularly over a long period of time is called

What is the average share price for the dollar-cost averaging strategy shown below? ​

Savings is the accumulation of excess funds by intentionally spending less than you earn.

When choosing among investment alternatives you want to focus on their

____ are located at the base of the investment risk pyramid.

Long-term investors seek growth in the value of their investments that equals the rate of inflation.

The first step in the investment planning process is to study available investment alternatives and learn as much as you can about the ones you like.

Investing goes beyond saving in that it

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

What is the average share price for the dollar-cost averaging strategy shown below?