Exam 13: Investing Fundamentals

Sam Waters just received $10,000 from his grandmother's estate. He has thought about buying himself a new Harley with the money but has decided instead to add the money to his mutual fund account. Which suggestion for obtaining the money he needs for investing is he following?

Which one of the following investments offers the greatest liquidity?

Which one of the following investments offers the least liquidity?

A decrease in the value of stocks, bonds, or other investments may cause investors to experience ____________ risk.

The rate of return on an investment has no effect on a long-term investment program.

Allen Arnold earns $3,000 per month. He pays his mortgage, utilities, grocery and other bills and then he makes sure to set aside $150 for his savings and investment accounts before he spends money to go to movies and other personal expenses. Which suggestion for obtaining the money he needs for investing is he following?

Today, federal, state, and local governments and most corporations have a home page where you can obtain valuable information.

Terry Hamilton has just received $30,000 from an uncle who died and is trying to decide how to invest it. She has done some research has decided that about 30% of the money should go into large cap stocks, 20% into medium cap stocks, 15% into small cap stocks, 10% into bonds, 10% into foreign stock, and 15% into cash. She thinks that even if one area does not do that well, the rest will so that her overall return will be pretty good. What aspect of investing is Terry most concerned about?

The decision to establish an investment plan is an important first step to accomplishing your financial goals.

Which one of the following statements is true?

Once you have made a decision to buy an investment, there is no need for continued evaluation.

Which one of the following individuals should have a higher tolerance for risk?

Lester McCann wants to invest but is worried about risk. In particular, he is worried that the money he invests today will not buy as much ten years from now. What type of risk concerns Lester?

Which one of the following would not be considered a safe investment for a conservative investor?

Which of the following statements is true?

An investor concerned with a predictable source of income provided by an investment would choose:

One risk associated with a global investment is the difficulty of obtaining reliable accounting information needed to evaluate stocks issued by international companies.

Which one of the following is the most readily available source of current price information for an investment in stocks or bonds?

John Hernandez is 24 and has saved enough money to fund an adequate emergency fund. In addition, he has saved $5,600 that can be used to fund an investment program. He is single, has no dependents, and would like to retire when he is 60. Which one of the investment factors listed below would be most important for an investor like Mr. Hernandez?

A speculative investment is an investment that is made in the hope of earning a relatively large profit over a long period of time.