Question 1

Risk is defined as the possibility of loss.

Accepted Answer

A) True 
 B)False

Question 2

Investment professionals who take companies public,arrange mergers and acquisitions,and participate in municipal bond issues are:

Accepted Answer

A) registered representatives. 
B) security analysts. 
C) investment bankers. 
D) portfolio managers. 
A) registered representatives. 
B) security analysts. 
C) investment bankers. 
D) portfolio managers.

Question 3

A 25-year old college graduate is participating in a 401(k)retirement plan and wishes to minimize risk by eliminating stock-based mutual funds and other equities from his investment portfolio.What will this probably do to his ending retirement funds in 40 years?

Accepted Answer

If he minimizes risk,then he w

Question 4

Financial planners must pass a standardized test and possess certain credentials.

Accepted Answer

A) True 
 B)False

Question 5

A Chartered Financial Analyst designation is a(n)

Accepted Answer

A) SEC-approved and awarded designation. 
B) certification of a successful investing record. 
C) professional designation awarded for meeting recognized standards of conduct and competency. 
D) professional designation awarded by the brokerage industry. 
A) SEC-approved and awarded designation. 
B) certification of a successful investing record. 
C) professional designation awarded for meeting recognized standards of conduct and competency. 
D) professional designation awarded by the brokerage industry.

Question 6

Investment decision making traditionally consists of two steps:

Accepted Answer

A) investment banking and security analysis. 
B) buying and selling. 
C) risk and expected return. 
D) security analysis and portfolio management. 
A) investment banking and security analysis. 
B) buying and selling. 
C) risk and expected return. 
D) security analysis and portfolio management.

Question 7

The two major considerations in investing are return and timing.

Accepted Answer

A) True 
 B)False

Question 8

Will risk-averse investors ever include commodity futures or options in their portfolios?Explain.

Accepted Answer

They may include these items in their po

Question 9

Both 401(k)plans and IRAs are self-directed retirement plans.

Accepted Answer

A) True 
 B)False

Question 10

Regulation FD applies to disclosure between:

Accepted Answer

A) private companies and public officials. 
B) public companies and investment professionals. 
C) public companies and public officials. 
D) private companies and investment professionals. 
A) private companies and public officials. 
B) public companies and investment professionals. 
C) public companies and public officials. 
D) private companies and investment professionals.

Question 11

In general,the ex ante risk-return tradeoff:

Accepted Answer

A) slopes upward. 
B) slopes downward. 
C) is flat. 
D) is impossible to determine. 
A) slopes upward. 
B) slopes downward. 
C) is flat. 
D) is impossible to determine.

Question 12

Security analysis is most concerned with:

Accepted Answer

A) analysis of the overall securities market and its direction. 
B) valuation and analysis of individual securities. 
C) purchasing securities at the best price. 
D) determination of the investor's required return. 
A) analysis of the overall securities market and its direction. 
B) valuation and analysis of individual securities. 
C) purchasing securities at the best price. 
D) determination of the investor's required return.

Question 13

The rise of the Internet has:

Accepted Answer

A) greatly increased the cost of security trading. 
B) significantly democratized the flow of investment information. 
C) led to fewer discount brokers. 
D) led to large amounts of security fraud. 
A) greatly increased the cost of security trading. 
B) significantly democratized the flow of investment information. 
C) led to fewer discount brokers. 
D) led to large amounts of security fraud.

Question 14

Which of the following investment areas relies heavily on mathematical and statistical models?

Accepted Answer

A) Security analysis 
B) Portfolio management 
C) Institutional investing 
D) Retirement planning 
A) Security analysis 
B) Portfolio management 
C) Institutional investing 
D) Retirement planning

Question 15

Investors unwilling to assume risk should be satisfied with the rate of inflation as their investment return.

Accepted Answer

A) True 
 B)False

Question 16

What are some of the career opportunities in the investment industry?

Accepted Answer

Investment banker,merger and a

Question 17

What are some of the reasons driving so many individual investors to manage their own investments today versus the conventional route of investing through a financial advisor or stockbroker?

Accepted Answer

The emergence of the Internet has produc

Question 18

Most financial advisors are registered with the Securities and Exchange Commission as:

Accepted Answer

A) registered representatives. 
B) registered investment advisors. 
C) registered financial planners. 
D) registered securities consultants. 
A) registered representatives. 
B) registered investment advisors. 
C) registered financial planners. 
D) registered securities consultants.

Question 19

Which of the following is the best definition of wealth?

Accepted Answer

A) The sum of all current and future income 
B) The total of all assets and all income 
C) The total of assets and income less any liabilities 
D) The sum of current income and the present value of future income 
A) The sum of all current and future income 
B) The total of all assets and all income 
C) The total of assets and income less any liabilities 
D) The sum of current income and the present value of future income

Question 20

Which of the following statements concerning global stock market capitalization is true?

Accepted Answer

A) The United States accounts for roughly 65 percent of stock market capitalization worldwide. 
B) The United States accounts for roughly 40 percent of stock market capitalization worldwide. 
C) The United States accounts for roughly 25 percent of stock market capitalization. 
D) It is expected that the United States will increase its future percentage of global stock market capitalization. 
A) The United States accounts for roughly 65 percent of stock market capitalization worldwide. 
B) The United States accounts for roughly 40 percent of stock market capitalization worldwide. 
C) The United States accounts for roughly 25 percent of stock market capitalization. 
D) It is expected that the United States will increase its future percentage of global stock market capitalization.

Exam 1: Understanding Investments

Risk is defined as the possibility of loss.

Investment professionals who take companies public,arrange mergers and acquisitions,and participate in municipal bond issues are:

A 25-year old college graduate is participating in a 401(k)retirement plan and wishes to minimize risk by eliminating stock-based mutual funds and other equities from his investment portfolio.What will this probably do to his ending retirement funds in 40 years?

Financial planners must pass a standardized test and possess certain credentials.

A Chartered Financial Analyst designation is a(n)

Investment decision making traditionally consists of two steps:

The two major considerations in investing are return and timing.

Will risk-averse investors ever include commodity futures or options in their portfolios?Explain.

Both 401(k)plans and IRAs are self-directed retirement plans.

Regulation FD applies to disclosure between:

In general,the ex ante risk-return tradeoff:

Security analysis is most concerned with:

The rise of the Internet has:

Which of the following investment areas relies heavily on mathematical and statistical models?

Investors unwilling to assume risk should be satisfied with the rate of inflation as their investment return.

What are some of the career opportunities in the investment industry?

What are some of the reasons driving so many individual investors to manage their own investments today versus the conventional route of investing through a financial advisor or stockbroker?

Most financial advisors are registered with the Securities and Exchange Commission as:

Which of the following is the best definition of wealth?

Which of the following statements concerning global stock market capitalization is true?

Investment Alternatives

Indirect Investing

Securities Markets and Market Indexes

How Securities Are Traded

The Risks and Returns From Investing

Portfolio Theory

Portfolio Selection

Asset Pricing Models

Common Stock Valuation

Common Stocks: Analysis and Strategy

Market Efficiency

Economy Market Analysis

Industry Analysis

Company Analysis

Technical Analysis

Bond Yields

Bonds: Analysis and Strategy

Options

Futures

Portfolio Management

Evaluation of Investment Performance

Filters