Question 1

The average share price is the actual cost basis of the investment used for tax purposes.

Accepted Answer

A) True 
 B)False

Question 2

Ownership investments generally

Accepted Answer

A) offer a fixed rate of return. 
B) have a set maturity date. 
C) offer a limited return. 
D) produce capital gains. 
A) offer a fixed rate of return. 
B) have a set maturity date. 
C) offer a limited return. 
D) produce capital gains.

Question 3

Dividend reinvestment plans are appropriate for investors who do not currently need dividend income.

Accepted Answer

A) True 
 B)False

Question 4

Investors in securities can diversify within an investment medium,such as different stocks in one industry,or across alternatives,such as in stocks,bonds,and mutual funds.

Accepted Answer

A) True 
 B)False

Question 5

Market volatility is the degree to which a market fluctuates up and down over time.

Accepted Answer

A) True 
 B)False

Question 6

The return on lending investments is limited to what the investor was originally promised.

Accepted Answer

A) True 
 B)False

Question 7

A bond

Accepted Answer

A) represents a share of ownership in a corporation. 
B) represents a debt owed by a business or organization. 
C) is a portfolio. 
D) an example of leverage. 
A) represents a share of ownership in a corporation. 
B) represents a debt owed by a business or organization. 
C) is a portfolio. 
D) an example of leverage.

Question 8

Investment risk is the possibility that an investment may lose value.

Accepted Answer

A) True 
 B)False

Question 9

An explanation of your investment philosophy and your logic on investing to reach specific goals is a(n)

Accepted Answer

A) investment portfolio. 
B) investment plan. 
C) marketing strategy. 
D) security. 
A) investment portfolio. 
B) investment plan. 
C) marketing strategy. 
D) security.

Question 10

Anticipated returns are not be part of the investment planning process as that is just guessing.

Accepted Answer

A) True 
 B)False

Question 11

The real rate of return on a taxable investment yielding 8 percent annually would be ____ percent if the investor were in the 15 percent marginal tax bracket and inflation were 2 percent.

Accepted Answer

A) 6.80 percent 
B) 6.00 percent 
C) 4.80 percent 
D) 5.10 percent 
A) 6.80 percent 
B) 6.00 percent 
C) 4.80 percent 
D) 5.10 percent

Question 12

Securities are made up of

Accepted Answer

A) stocks. 
B) bonds. 
C) mutual funds. 
D) (All of these) 
A) stocks. 
B) bonds. 
C) mutual funds. 
D) (All of these)

Question 13

Which is not an advantage of dollar-cost averaging?

Accepted Answer

A) It reduces the average share cost. 
B) It avoids the risks of investment timing. 
C) It minimizes taxes. 
D) It requires investor discipline. 
A) It reduces the average share cost. 
B) It avoids the risks of investment timing. 
C) It minimizes taxes. 
D) It requires investor discipline.

Question 14

Commissions are generally based on the

Accepted Answer

A) increase in the value of the investment. 
B) value of the transaction. 
C) total value of the assets in the account. 
D) length of time the assets have been invested. 
A) increase in the value of the investment. 
B) value of the transaction. 
C) total value of the assets in the account. 
D) length of time the assets have been invested.

Question 15

____ is an example of a lending investment.

Accepted Answer

A) Preferred corporate stock 
B) Mortgage-backed bonds 
C) Common corporate stock 
D) Mutual fund shares 
A) Preferred corporate stock 
B) Mortgage-backed bonds 
C) Common corporate stock 
D) Mutual fund shares

Question 16

If you have a(n) ____ investment philosophy,you accept very little risk and are generally rewarded with relatively low rates of return.

Accepted Answer

A) aggressive 
B) conservative 
C) moderate 
D) ultraconservative 
A) aggressive 
B) conservative 
C) moderate 
D) ultraconservative

Question 17

Active investors earn higher returns than passive investors over the long term.

Accepted Answer

A) True 
 B)False

Question 18

It is time to sell a stock when the share price is much lower than what you believe the company is worth.

Accepted Answer

A) True 
 B)False

Question 19

Generally investments with high capital gains potential also pay high current income.

Accepted Answer

A) True 
 B)False

Question 20

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

Accepted Answer

A) $33.20 
B) $34.29 
C) $34.80 
D) $36.00 
A) $33.20 
B) $34.29 
C) $34.80 
D) $36.00

The average share price is the actual cost basis of the investment used for tax purposes.

Ownership investments generally

Dividend reinvestment plans are appropriate for investors who do not currently need dividend income.

Investors in securities can diversify within an investment medium,such as different stocks in one industry,or across alternatives,such as in stocks,bonds,and mutual funds.

Market volatility is the degree to which a market fluctuates up and down over time.

The return on lending investments is limited to what the investor was originally promised.

A bond

Investment risk is the possibility that an investment may lose value.

An explanation of your investment philosophy and your logic on investing to reach specific goals is a(n)

Anticipated returns are not be part of the investment planning process as that is just guessing.

The real rate of return on a taxable investment yielding 8 percent annually would be ____ percent if the investor were in the 15 percent marginal tax bracket and inflation were 2 percent.

Securities are made up of

Which is not an advantage of dollar-cost averaging?

Commissions are generally based on the

____ is an example of a lending investment.

If you have a(n) ____ investment philosophy,you accept very little risk and are generally rewarded with relatively low rates of return.

Active investors earn higher returns than passive investors over the long term.

It is time to sell a stock when the share price is much lower than what you believe the company is worth.

Generally investments with high capital gains potential also pay high current income.

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

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

The average share price is the actual cost basis of the investment used for tax purposes.

Ownership investments generally

Dividend reinvestment plans are appropriate for investors who do not currently need dividend income.

Investors in securities can diversify within an investment medium,such as different stocks in one industry,or across alternatives,such as in stocks,bonds,and mutual funds.

Market volatility is the degree to which a market fluctuates up and down over time.

The return on lending investments is limited to what the investor was originally promised.

A bond

Investment risk is the possibility that an investment may lose value.

An explanation of your investment philosophy and your logic on investing to reach specific goals is a(n)

Anticipated returns are not be part of the investment planning process as that is just guessing.

The real rate of return on a taxable investment yielding 8 percent annually would be ____ percent if the investor were in the 15 percent marginal tax bracket and inflation were 2 percent.

Securities are made up of

Which is not an advantage of dollar-cost averaging?

Commissions are generally based on the

____ is an example of a lending investment.

If you have a(n) ____ investment philosophy,you accept very little risk and are generally rewarded with relatively low rates of return.

Active investors earn higher returns than passive investors over the long term.

It is time to sell a stock when the share price is much lower than what you believe the company is worth.

Generally investments with high capital gains potential also pay high current income.

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

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