Question 1

Which one of the following investments offers the least liquidity?

Accepted Answer

A) Checking account 
B) Government bond 
C) Real estate 
D) Savings account 
E) Certificate of deposit 
A) Checking account 
B) Government bond 
C) Real estate 
D) Savings account 
E) Certificate of deposit

Question 2

Which one of the following is false?

Accepted Answer

A) You can obtain recommendations to buy or sell stocks and other securities by accessing Internet sites. 
B) There is a wealth of investment information available, but most small investors cannot afford to use it. 
C) You can obtain current price information for stocks, bonds, and mutual funds by using the Internet. 
D) You can trade securities online. 
E) Federal, state, and local governments have a home page where you can obtain investment information. 
A) You can obtain recommendations to buy or sell stocks and other securities by accessing Internet sites. 
B) There is a wealth of investment information available, but most small investors cannot afford to use it. 
C) You can obtain current price information for stocks, bonds, and mutual funds by using the Internet. 
D) You can trade securities online. 
E) Federal, state, and local governments have a home page where you can obtain investment information.

Question 3

There is no relationship between risk and safety.

Accepted Answer

A) True 
 B)False

Question 4

Alice Cooper contributes ten percent of her monthly earnings to her 401k 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 5

Garrett Jennings is thinking about buying an investment that represents safety and income within the investment pyramid.Which investment is Garrett thinking about purchasing?

Accepted Answer

A) Speculative stocks, options, and commodities 
B) Growth stocks and rental property 
C) U.S.securities and conservative mutual funds 
D) CDs and U.S.government bonds 
E) All of these are appropriate for safety and income. 
A) Speculative stocks, options, and commodities 
B) Growth stocks and rental property 
C) U.S.securities and conservative mutual funds 
D) CDs and U.S.government bonds 
E) All of these are appropriate for safety and income.

Question 6

The maturity dates for most bonds range between ____________ years.

Accepted Answer

A) 0 to 5 
B) 5 to 20 
C) 10 to 20 
D) 1 to 30 
E) 15 to 40 
A) 0 to 5 
B) 5 to 20 
C) 10 to 20 
D) 1 to 30 
E) 15 to 40

Question 7

Which one of the following is false?

Accepted Answer

A) Mutual funds include investments in stocks and bonds. 
B) Diversification provided by a mutual fund reduces risk. 
C) The goals of one mutual fund investor may differ from those of another. 
D) Since mutual fund managers are professionals, there is no need for the investor to evaluate a mutual fund. 
E) Mutual fund investments range from very conservative to extremely speculative investments. 
A) Mutual funds include investments in stocks and bonds. 
B) Diversification provided by a mutual fund reduces risk. 
C) The goals of one mutual fund investor may differ from those of another. 
D) Since mutual fund managers are professionals, there is no need for the investor to evaluate a mutual fund. 
E) Mutual fund investments range from very conservative to extremely speculative investments.

Question 8

A prospectus discloses information about corporate earnings,assets and liabilities,products or services,and the qualifications of top management.

Accepted Answer

A) True 
 B)False

Question 9

The advantages of asset allocation include all of the following except:

Accepted Answer

A) It lessens risk for the investment program. 
B) It helps avoid the pitfall of putting all your eggs in one basket. 
C) It uses different asset classes to provide a measure of safety. 
D) It helps offset a loss in one investment with gains in other investments. 
E) It is viewed as a tool that can reduce the risk associated with short-term investment programs. 
A) It lessens risk for the investment program. 
B) It helps avoid the pitfall of putting all your eggs in one basket. 
C) It uses different asset classes to provide a measure of safety. 
D) It helps offset a loss in one investment with gains in other investments. 
E) It is viewed as a tool that can reduce the risk associated with short-term investment programs.

Question 10

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 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 is uncertain as 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) Inflation 
C) Diversification 
D) Liquidity 
E) Investment growth 
A) Risk 
B) Inflation 
C) Diversification 
D) Liquidity 
E) Investment growth

Question 12

Which of the following is not true of mutual funds?

Accepted Answer

A) Mutual funds range from very conservative to extremely speculative investments. 
B) They do not offer diversification. 
C) They can be used for retirement accounts. 
D) This investment provides professional management. 
E) A mutual fund pools the money from many investors. 
A) Mutual funds range from very conservative to extremely speculative investments. 
B) They do not offer diversification. 
C) They can be used for retirement accounts. 
D) This investment provides professional management. 
E) A mutual fund pools the money from many investors.

Question 13

An investment that an investor expects will increase in value is known as a growth investment.

Accepted Answer

A) True 
 B)False

Question 14

An investment program can be seen as a pyramid consisting of _____levels?

Accepted Answer

A) 1 
B) 2 
C) 3 
D) 4 
E) 5 
A) 1 
B) 2 
C) 3 
D) 4 
E) 5

Question 15

Most large investors find many of the investor services to be too expensive for personal subscriptions.

Accepted Answer

A) True 
 B)False

Question 16

If interest rates in the overall economy decrease to 6 percent,which one of the following is most likely to be the approximate market value of a $1,000 corporate bond with a fixed interest rate of 7 percent? Round to the nearest hundred.

Accepted Answer

A) $400 
B) $1,200 
C) $900 
D) $1,000 
E) $700 
A) $400 
B) $1,200 
C) $900 
D) $1,000 
E) $700

Question 17

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?

Accepted Answer

A) Paying himself 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 himself 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 18

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 19

Twenty years ago,you began investing $2,000 a year.Because your investments earned an average of 8 percent a year,your investment portfolio has a current dollar value of $92,000.How much did you earn on your investments over the 20-year period of time?

Accepted Answer

A) $2,000 
B) $40,000 
C) $52,000 
D) $92,000 
E) $132,000 
A) $2,000 
B) $40,000 
C) $52,000 
D) $92,000 
E) $132,000

Question 20

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

Which one of the following investments offers the least liquidity?

Which one of the following is false?

There is no relationship between risk and safety.

Alice Cooper contributes ten percent of her monthly earnings to her 401k 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?

Garrett Jennings is thinking about buying an investment that represents safety and income within the investment pyramid.Which investment is Garrett thinking about purchasing?

The maturity dates for most bonds range between ____________ years.

Which one of the following is false?

A prospectus discloses information about corporate earnings,assets and liabilities,products or services,and the qualifications of top management.

The advantages of asset allocation include all of the following except:

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

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 is uncertain as some stocks have lost a lot of value for their owners recently.What aspect of investing is she most concerned about?

Which of the following is not true of mutual funds?

An investment that an investor expects will increase in value is known as a growth investment.

An investment program can be seen as a pyramid consisting of _____levels?

Most large investors find many of the investor services to be too expensive for personal subscriptions.

If interest rates in the overall economy decrease to 6 percent,which one of the following is most likely to be the approximate market value of a $1,000 corporate bond with a fixed interest rate of 7 percent? Round to the nearest hundred.

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

Twenty years ago,you began investing $2,000 a year.Because your investments earned an average of 8 percent a year,your investment portfolio has a current dollar value of $92,000.How much did you earn on your investments over the 20-year period of time?

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?

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 Stock

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

Which one of the following investments offers the least liquidity?

Which one of the following is false?

There is no relationship between risk and safety.

Alice Cooper contributes ten percent of her monthly earnings to her 401k 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?

Garrett Jennings is thinking about buying an investment that represents safety and income within the investment pyramid.Which investment is Garrett thinking about purchasing?

The maturity dates for most bonds range between ____________ years.

Which one of the following is false?

A prospectus discloses information about corporate earnings,assets and liabilities,products or services,and the qualifications of top management.

The advantages of asset allocation include all of the following except:

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

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 is uncertain as some stocks have lost a lot of value for their owners recently.What aspect of investing is she most concerned about?

Which of the following is not true of mutual funds?

An investment that an investor expects will increase in value is known as a growth investment.

An investment program can be seen as a pyramid consisting of _____levels?

Most large investors find many of the investor services to be too expensive for personal subscriptions.

If interest rates in the overall economy decrease to 6 percent,which one of the following is most likely to be the approximate market value of a $1,000 corporate bond with a fixed interest rate of 7 percent? Round to the nearest hundred.

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

Twenty years ago,you began investing $2,000 a year.Because your investments earned an average of 8 percent a year,your investment portfolio has a current dollar value of $92,000.How much did you earn on your investments over the 20-year period of time?

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?

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 Stock

Investing in Bonds

Investing in Mutual Funds

Investing in Real Estate and Other Investment Alternatives

Starting Early: Retirement Planning

Estate Planning

Filters