Question 1

Liquidity is the ease with which an asset can be converted to cash without a substantial loss in dollar value.

Accepted Answer

A) True 
 B)False

Question 2

Bob and Mary Martin are both 35 years old. Although they graduated from college almost 15 years ago, they have never developed a diversified investment program. What extra money they had was invested in high-tech stocks that did quite well until the last five years. Then, with the economic downturn, they encountered major losses. How could asset allocation have reduced the dollar amounts of the Martin's losses?

Accepted Answer

Asset allocation is the process of sprea

Question 3

All of the following statements are considered to be good advice for a potential investor starting an investment program except:

Accepted Answer

A)  Work to balance your budget. 
B)  Increase credit purchases to conserve cash. 
C)  Establish specific and measurable investment goals. 
D)  Start an emergency fund. 
E)  Establish a line of credit. 
A)  Work to balance your budget. 
B)  Increase credit purchases to conserve cash. 
C)  Establish specific and measurable investment goals. 
D)  Start an emergency fund. 
E)  Establish a line of credit.

Question 4

Which one of the following investments offers the least amount of growth potential?

Accepted Answer

A)  Real estate 
B)  Common stock 
C)  Mutual funds 
D)  Options 
E)  Preferred stock 
A)  Real estate 
B)  Common stock 
C)  Mutual funds 
D)  Options 
E)  Preferred stock

Question 5

Jack Masters earns $40,000 a year. His monthly expenses total $2,100. What is the minimum amount of money that Mr. Masters should set aside in an emergency fund?

Accepted Answer

A)  $2,100 
B)  $4,200 
C)  $6,300 
D)  $8,400 
E)  $10,000 
A)  $2,100 
B)  $4,200 
C)  $6,300 
D)  $8,400 
E)  $10,000

Question 6

Asset allocation is the process of spreading your assets among several different types of investments to lessen risk.

Accepted Answer

A) True 
 B)False

Question 7

Normally, corporate bondholders receive interest:

Accepted Answer

A)  monthly. 
B)  every three months. 
C)  every six months. 
D)  yearly. 
E)  only when the bond matures. 
A)  monthly. 
B)  every three months. 
C)  every six months. 
D)  yearly. 
E)  only when the bond matures.

Question 8

In how many of the years since 1926 have stocks lost money?

Accepted Answer

A)  0 
B)  10 
C)  25 
D)  40 
E)  55 
A)  0 
B)  10 
C)  25 
D)  40 
E)  55

Question 9

Eric Peltz earns $80,000 a year. His monthly expenses total $4,300. What is the minimum amount of money that Mr. Peltz should set aside in an emergency fund?

Accepted Answer

A)  $2,150 
B)  $4,300 
C)  $8,600 
D)  $12,900 
E)  $43,000 
A)  $2,150 
B)  $4,300 
C)  $8,600 
D)  $12,900 
E)  $43,000

Question 10

The fees for investor services and newsletters generally range from ____________ per year.

Accepted Answer

A)  $10 to $20 
B)  $20 to $30 
C)  $30 to $1,000 
D)  $300 to $1,000 
E)  over $1,000 
A)  $10 to $20 
B)  $20 to $30 
C)  $30 to $1,000 
D)  $300 to $1,000 
E)  over $1,000

Question 11

The amount of time that your investments have to work for you is an important factor when managing your investment portfolio.

Accepted Answer

A) True 
 B)False

Question 12

A credit ceiling on a credit card is determined by the borrower and is the dollar amount that they want to borrow using the cash advance provision on their credit card.

Accepted Answer

A) True 
 B)False

Question 13

The fees for investor services and newsletters usually range between $30 and $1,000 per year.

Accepted Answer

A) True 
 B)False

Question 14

Which one of the following is a true statement?

Accepted Answer

A)  Professional management is an especially important factor for investors purchasing a mutual fund. 
B)  The only reason investors purchase mutual funds is interest rate risk. 
C)  With mutual funds may experience loss, your original investment is guaranteed. 
D)  Mutual funds are all designed to appeal to conservative investors with no investment goals. 
E)  Professional market timers will always choose the right mutual fund for a particular individual. 
A)  Professional management is an especially important factor for investors purchasing a mutual fund. 
B)  The only reason investors purchase mutual funds is interest rate risk. 
C)  With mutual funds may experience loss, your original investment is guaranteed. 
D)  Mutual funds are all designed to appeal to conservative investors with no investment goals. 
E)  Professional market timers will always choose the right mutual fund for a particular individual.

Question 15

Bondholders generally receive interest payments every six months.

Accepted Answer

A) True 
 B)False

Question 16

A $1,000 corporate bond pays 6.5 percent a year. What is the annual interest you will receive?

Accepted Answer

A)  $0.65 
B)  $6.50 
C)  $65.00 
D)  $1,060.50 
E)  $1,065.00 
A)  $0.65 
B)  $6.50 
C)  $65.00 
D)  $1,060.50 
E)  $1,065.00

Question 17

Allison Peavy wants to invest but is worried about risk: In particular, she is worried that bad management and increased competition in the wireless phone market will make these companies less profitable than expected. What type of risk is Allison most concerned with?

Accepted Answer

A)  Inflation 
B)  Interest rate 
C)  Business failure 
D)  Systematic 
E)  None of these 
A)  Inflation 
B)  Interest rate 
C)  Business failure 
D)  Systematic 
E)  None of these

Question 18

The ease with which an investment can be converted to cash without a substantial loss in dollar value is called the:

Accepted Answer

A)  asset value. 
B)  liquidity factor. 
C)  growth potential. 
D)  fixed cost factor. 
E)  variable cost factor. 
A)  asset value. 
B)  liquidity factor. 
C)  growth potential. 
D)  fixed cost factor. 
E)  variable cost factor.

Question 19

Which one of these investments pools the funds of many investors and hires a professional money manager to manage those funds?

Accepted Answer

A)  NOW account 
B)  Securities exchange 
C)  Certificate of deposit 
D)  Mutual fund 
E)  Stock option 
A)  NOW account 
B)  Securities exchange 
C)  Certificate of deposit 
D)  Mutual fund 
E)  Stock option

Question 20

Twenty years ago, you began investing $250 a month. Because your investments earned an average of 8 percent a year, your investment portfolio has a current dollar value of $145,000. How much did you earn on your investments over the 20-year period of time?

Accepted Answer

A)  $142,000 
B)  $80,000 
C)  $85,000 
D)  $140,000 
E)  $132,000 
A)  $142,000 
B)  $80,000 
C)  $85,000 
D)  $140,000 
E)  $132,000

Liquidity is the ease with which an asset can be converted to cash without a substantial loss in dollar value.

All of the following statements are considered to be good advice for a potential investor starting an investment program except:

Which one of the following investments offers the least amount of growth potential?

Jack Masters earns $40,000 a year. His monthly expenses total $2,100. What is the minimum amount of money that Mr. Masters should set aside in an emergency fund?

Asset allocation is the process of spreading your assets among several different types of investments to lessen risk.

Normally, corporate bondholders receive interest:

In how many of the years since 1926 have stocks lost money?

Eric Peltz earns $80,000 a year. His monthly expenses total $4,300. What is the minimum amount of money that Mr. Peltz should set aside in an emergency fund?

The fees for investor services and newsletters generally range from ____________ per year.

The amount of time that your investments have to work for you is an important factor when managing your investment portfolio.

A credit ceiling on a credit card is determined by the borrower and is the dollar amount that they want to borrow using the cash advance provision on their credit card.

The fees for investor services and newsletters usually range between $30 and $1,000 per year.

Which one of the following is a true statement?

Bondholders generally receive interest payments every six months.

A $1,000 corporate bond pays 6.5 percent a year. What is the annual interest you will receive?

Allison Peavy wants to invest but is worried about risk: In particular, she is worried that bad management and increased competition in the wireless phone market will make these companies less profitable than expected. What type of risk is Allison most concerned with?

The ease with which an investment can be converted to cash without a substantial loss in dollar value is called the:

Which one of these investments pools the funds of many investors and hires a professional money manager to manage those funds?

Twenty years ago, you began investing $250 a month. Because your investments earned an average of 8 percent a year, your investment portfolio has a current dollar value of $145,000. How much did you earn on your investments over the 20-year period of time?

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

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Exam 13: Investing Fundamentals

Liquidity is the ease with which an asset can be converted to cash without a substantial loss in dollar value.

All of the following statements are considered to be good advice for a potential investor starting an investment program except:

Which one of the following investments offers the least amount of growth potential?

Jack Masters earns $40,000 a year. His monthly expenses total $2,100. What is the minimum amount of money that Mr. Masters should set aside in an emergency fund?

Asset allocation is the process of spreading your assets among several different types of investments to lessen risk.

Normally, corporate bondholders receive interest:

In how many of the years since 1926 have stocks lost money?

Eric Peltz earns $80,000 a year. His monthly expenses total $4,300. What is the minimum amount of money that Mr. Peltz should set aside in an emergency fund?

The fees for investor services and newsletters generally range from ____________ per year.

The amount of time that your investments have to work for you is an important factor when managing your investment portfolio.

A credit ceiling on a credit card is determined by the borrower and is the dollar amount that they want to borrow using the cash advance provision on their credit card.

The fees for investor services and newsletters usually range between $30 and $1,000 per year.

Which one of the following is a true statement?

Bondholders generally receive interest payments every six months.

A $1,000 corporate bond pays 6.5 percent a year. What is the annual interest you will receive?

Allison Peavy wants to invest but is worried about risk: In particular, she is worried that bad management and increased competition in the wireless phone market will make these companies less profitable than expected. What type of risk is Allison most concerned with?

The ease with which an investment can be converted to cash without a substantial loss in dollar value is called the:

Which one of these investments pools the funds of many investors and hires a professional money manager to manage those funds?

Twenty years ago, you began investing $250 a month. Because your investments earned an average of 8 percent a year, your investment portfolio has a current dollar value of $145,000. How much did you earn on your investments over the 20-year period of time?

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