Question 1

When a bondholder loses money because interest rates in the economy increase, it is an example of ____________ risk.

Accepted Answer

A)  market 
B)  interest rate 
C)  inflation 
D)  business failure 
E)  current 
A)  market 
B)  interest rate 
C)  inflation 
D)  business failure 
E)  current

Question 2

Preferred stock represents the most basic form of corporate ownership.

Accepted Answer

A) True 
 B)False

Question 3

Alice Cooper contributes ten percent of her monthly earnings to her 401(k) plan at work. The plan allows her to invest in several different types of mutual funds and her employer matches up to 5% of her salary. Which suggestion for obtaining the money she needs for investing is she following?

Accepted Answer

A)  Paying herself first 
B)  Taking advantage of employer-sponsored retirement programs 
C)  Participating in an elective savings program 
D)  Making a special effort once or twice a year to save 
E)  Taking advantage of gifts, inheritance and other windfalls 
A)  Paying herself first 
B)  Taking advantage of employer-sponsored retirement programs 
C)  Participating in an elective savings program 
D)  Making a special effort once or twice a year to save 
E)  Taking advantage of gifts, inheritance and other windfalls

Question 4

Brenda Lee has received a $10,000 gift from her mother and is trying to decide how to invest it. She thinks she would like to invest it in stocks because she knows that stocks have been earning about a 10% rate of return over the last several years. What aspect of investing interests Brenda?

Accepted Answer

A)  Risk 
B)  Return 
C)  Diversification 
D)  Liquidity 
E)  Income 
A)  Risk 
B)  Return 
C)  Diversification 
D)  Liquidity 
E)  Income

Question 5

Describe the sources of investment information investors can use to evaluate a potential investment.

Accepted Answer

In Chapter 13, the following sources of

Question 6

Establishing a(n) ___________ ensures that you will have an amount of money that can be obtained quickly in case of immediate need.

Accepted Answer

A)  traditional IRA 
B)  emergency fund 
C)  Roth IRA 
D)  403b 
E)  401k 
A)  traditional IRA 
B)  emergency fund 
C)  Roth IRA 
D)  403b 
E)  401k

Question 7

An emergency fund is an amount of money that can be obtained quickly in case of immediate need.

Accepted Answer

A) True 
 B)False

Question 8

Matt Jackson is single and 24. He has just graduated from college and obtained a job making $26,400 a year. Which one of the following investments would you recommend for his long-term investment program?

Accepted Answer

A)  Corporate bonds 
B)  Government bonds 
C)  Growth stocks 
D)  Commodities 
E)  Money-market fund 
A)  Corporate bonds 
B)  Government bonds 
C)  Growth stocks 
D)  Commodities 
E)  Money-market fund

Question 9

After the death of her husband, Gina Baker, 35, received a check for $350,000 from a life insurance company. Gina has two small children and wants to make sure that both she and the children are taken care of in the future. Based on this information, which of the investment factors listed below would be the most important to Gina in her investment program?

Accepted Answer

A)  Beta 
B)  Safety 
C)  Business failure 
D)  Market risk 
E)  Liquidity 
A)  Beta 
B)  Safety 
C)  Business failure 
D)  Market risk 
E)  Liquidity

Question 10

Because of the age factor, most young investors tend to invest a large percentage of their nest egg in growth-oriented investments.

Accepted Answer

A) True 
 B)False

Question 11

Gina Davidson has received $50,000 in a divorce settlement and is trying to decide how to invest it. She has looked at stocks but knows that some stocks have lost a lot of value for their owners recently. What aspect of investing is she most concerned about?

Accepted Answer

A)  Risk 
B)  Return 
C)  Diversification 
D)  Liquidity 
E)  Investment growth 
A)  Risk 
B)  Return 
C)  Diversification 
D)  Liquidity 
E)  Investment growth

Question 12

Bad products or poor corporate management may result in investors experiencing ______________ risk.

Accepted Answer

A)  inflation 
B)  interest rate 
C)  business failure 
D)  systematic 
E)  income 
A)  inflation 
B)  interest rate 
C)  business failure 
D)  systematic 
E)  income

Question 13

Which of the following is a true statement?

Accepted Answer

A)  The first order of business for an investor is acquiring the money needed to begin investing. 
B)  To be useful, investment objectives must be very general. 
C)  Investment goals are the same for each individual. 
D)  Because investment objectives deal with the future, it is useless to plan more than five years in the future. 
E)  A long-term investment objective involves a time period of five years or less. 
A)  The first order of business for an investor is acquiring the money needed to begin investing. 
B)  To be useful, investment objectives must be very general. 
C)  Investment goals are the same for each individual. 
D)  Because investment objectives deal with the future, it is useless to plan more than five years in the future. 
E)  A long-term investment objective involves a time period of five years or less.

Question 14

For an investor who wants to speculate, which of the following investments would be appropriate?

Accepted Answer

A)  Blue-chip stocks 
B)  Options 
C)  Utility stocks 
D)  Corporate bonds 
E)  Preferred stocks 
A)  Blue-chip stocks 
B)  Options 
C)  Utility stocks 
D)  Corporate bonds 
E)  Preferred stocks

Question 15

Over the past 50 years, stocks have returned approximately 10 percent a year while U.S. government bonds have returned about what percent?

Accepted Answer

A)  1 
B)  3 
C)  5 
D)  7 
E)  9 
A)  1 
B)  3 
C)  5 
D)  7 
E)  9

Question 16

Choose four of the investment alternatives presented in Chapter 13 and describe how the factors of safety, risk, income, growth, and liquidity affect that investment alternative.

Accepted Answer

The answer to this question depends on w

Question 17

A short-term investment objective is one that will be accomplished within a period of:

Accepted Answer

A)  one year or less. 
B)  two to five years. 
C)  more than five years. 
D)  three years or less. 
E)  two years or less. 
A)  one year or less. 
B)  two to five years. 
C)  more than five years. 
D)  three years or less. 
E)  two years or less.

Question 18

Which one of the following is a true statement?

Accepted Answer

A)  It is not possible to overpay for real estate. 
B)  Location is the least important factor when making a real estate investment. 
C)  There are many factors to consider before investing in real estate. 
D)  There is no reason to evaluate a real estate investment because real estate always increases in value sooner or later. 
E)  Finding a buyer for a piece of real estate is always easy. 
A)  It is not possible to overpay for real estate. 
B)  Location is the least important factor when making a real estate investment. 
C)  There are many factors to consider before investing in real estate. 
D)  There is no reason to evaluate a real estate investment because real estate always increases in value sooner or later. 
E)  Finding a buyer for a piece of real estate is always easy.

Question 19

An intermediate-term investment objective is defined as one that will be accomplished within a period of:

Accepted Answer

A)  five to ten years. 
B)  two to five years. 
C)  more than five years. 
D)  one to five years. 
E)  less than one year. 
A)  five to ten years. 
B)  two to five years. 
C)  more than five years. 
D)  one to five years. 
E)  less than one year.

Question 20

Which one of the following is not a recommended step individuals can use to weather a future financial crisis?

Accepted Answer

A)  Establish a smaller than usual emergency fund 
B)  Consider converting investments to cash to preserve value 
C)  Contact banks and credit card companies if you are unable to make payments 
D)  Pay off credit cards 
E)  Seek cheaper alternatives to frequently purchased items 
A)  Establish a smaller than usual emergency fund 
B)  Consider converting investments to cash to preserve value 
C)  Contact banks and credit card companies if you are unable to make payments 
D)  Pay off credit cards 
E)  Seek cheaper alternatives to frequently purchased items

When a bondholder loses money because interest rates in the economy increase, it is an example of ____________ risk.

Preferred stock represents the most basic form of corporate ownership.

Alice Cooper contributes ten percent of her monthly earnings to her 401(k) plan at work. The plan allows her to invest in several different types of mutual funds and her employer matches up to 5% of her salary. Which suggestion for obtaining the money she needs for investing is she following?

Brenda Lee has received a $10,000 gift from her mother and is trying to decide how to invest it. She thinks she would like to invest it in stocks because she knows that stocks have been earning about a 10% rate of return over the last several years. What aspect of investing interests Brenda?

Describe the sources of investment information investors can use to evaluate a potential investment.

Establishing a(n) ___________ ensures that you will have an amount of money that can be obtained quickly in case of immediate need.

An emergency fund is an amount of money that can be obtained quickly in case of immediate need.

Matt Jackson is single and 24. He has just graduated from college and obtained a job making $26,400 a year. Which one of the following investments would you recommend for his long-term investment program?

Because of the age factor, most young investors tend to invest a large percentage of their nest egg in growth-oriented investments.

Gina Davidson has received $50,000 in a divorce settlement and is trying to decide how to invest it. She has looked at stocks but knows that some stocks have lost a lot of value for their owners recently. What aspect of investing is she most concerned about?

Bad products or poor corporate management may result in investors experiencing ______________ risk.

Which of the following is a true statement?

For an investor who wants to speculate, which of the following investments would be appropriate?

Over the past 50 years, stocks have returned approximately 10 percent a year while U.S. government bonds have returned about what percent?

Choose four of the investment alternatives presented in Chapter 13 and describe how the factors of safety, risk, income, growth, and liquidity affect that investment alternative.

A short-term investment objective is one that will be accomplished within a period of:

Which one of the following is a true statement?

An intermediate-term investment objective is defined as one that will be accomplished within a period of:

Which one of the following is not a recommended step individuals can use to weather a future financial crisis?

Personal Finance Basics and the Time Value of Money

Financial Aspects of Career Planning

Money Management Strategy: Financial Statements and Budgeting

Planning Your Tax Strategy

Financial Services: Savings Plans and Payment Accounts

Introduction to Consumer Credit

Choosing a Source of Credit: The Costs of Credit Alternatives

Consumer Purchasing Strategies and Legal Protection

The Housing Decision: Factors and Finances

Property and Motor Vehicle Insurance

Health, Disability, and Long-Term Care Insurance

Life Insurance

Investing in Stocks

Investing in Bonds

Investing in Mutual Funds

Investing in Real Estate and Other Investment Alternatives

Starting Early: Retirement Planning

Estate Planning

Filters

Exam 13: Investing Fundamentals

When a bondholder loses money because interest rates in the economy increase, it is an example of ____________ risk.

Preferred stock represents the most basic form of corporate ownership.

Alice Cooper contributes ten percent of her monthly earnings to her 401(k) plan at work. The plan allows her to invest in several different types of mutual funds and her employer matches up to 5% of her salary. Which suggestion for obtaining the money she needs for investing is she following?

Brenda Lee has received a $10,000 gift from her mother and is trying to decide how to invest it. She thinks she would like to invest it in stocks because she knows that stocks have been earning about a 10% rate of return over the last several years. What aspect of investing interests Brenda?

Describe the sources of investment information investors can use to evaluate a potential investment.

Establishing a(n) ___________ ensures that you will have an amount of money that can be obtained quickly in case of immediate need.

An emergency fund is an amount of money that can be obtained quickly in case of immediate need.

Matt Jackson is single and 24. He has just graduated from college and obtained a job making $26,400 a year. Which one of the following investments would you recommend for his long-term investment program?

Because of the age factor, most young investors tend to invest a large percentage of their nest egg in growth-oriented investments.

Gina Davidson has received $50,000 in a divorce settlement and is trying to decide how to invest it. She has looked at stocks but knows that some stocks have lost a lot of value for their owners recently. What aspect of investing is she most concerned about?

Bad products or poor corporate management may result in investors experiencing ______________ risk.

Which of the following is a true statement?

For an investor who wants to speculate, which of the following investments would be appropriate?

Over the past 50 years, stocks have returned approximately 10 percent a year while U.S. government bonds have returned about what percent?

Choose four of the investment alternatives presented in Chapter 13 and describe how the factors of safety, risk, income, growth, and liquidity affect that investment alternative.

A short-term investment objective is one that will be accomplished within a period of:

Which one of the following is a true statement?

An intermediate-term investment objective is defined as one that will be accomplished within a period of:

Which one of the following is not a recommended step individuals can use to weather a future financial crisis?

Personal Finance Basics and the Time Value of Money

Financial Aspects of Career Planning

Money Management Strategy: Financial Statements and Budgeting

Planning Your Tax Strategy

Financial Services: Savings Plans and Payment Accounts

Introduction to Consumer Credit

Choosing a Source of Credit: The Costs of Credit Alternatives

Consumer Purchasing Strategies and Legal Protection

The Housing Decision: Factors and Finances

Property and Motor Vehicle Insurance

Health, Disability, and Long-Term Care Insurance

Life Insurance

Investing in Stocks

Investing in Bonds

Investing in Mutual Funds

Investing in Real Estate and Other Investment Alternatives

Starting Early: Retirement Planning

Estate Planning

Filters