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

If interest rates in the overall economy increase to 8 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) $0 
B) $1,100 
C) $900 
D) $1,000 
E) $1,300 
A) $0 
B) $1,100 
C) $900 
D) $1,000 
E) $1,300

Question 3

Which one of the following investments would provide the most predictable source of income?

Accepted Answer

A) Commodities 
B) Options 
C) Precious metals 
D) Common stock 
E) Government securities 
A) Commodities 
B) Options 
C) Precious metals 
D) Common stock 
E) Government securities

Question 4

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.What is he doing to obtain the money for investing?

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) Sacrificing some purchases to provide financing for investments 
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) Sacrificing some purchases to provide financing for investments

Question 5

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 appreciating by about 10% 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 6

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

Accepted Answer

A) True 
 B)False

Question 7

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) Notify lenders and credit card companies if you are unable to make payments 
D) Reduce spending 
E) Monitor the value of your investment and retirement accounts 
A) Establish a smaller than usual emergency fund 
B) Consider converting investments to cash to preserve value 
C) Notify lenders and credit card companies if you are unable to make payments 
D) Reduce spending 
E) Monitor the value of your investment and retirement accounts

Question 8

The ability of an investment to be converted to cash without a substantial loss in dollar value is called:

Accepted Answer

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

Question 9

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 10

James Gripka has a mutual fund that automatically takes $50 out of his paycheck each month.Which suggestion for obtaining the money he needs for investing is he following?

Accepted Answer

A) Taking advantage of gifts, inheritance and other windfalls 
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) Using financial leverage to increase investment returns 
A) Taking advantage of gifts, inheritance and other windfalls 
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) Using financial leverage to increase investment returns

Question 11

If a $1,000 bond pays 5% interest each year,how much would each semiannual interest payment be?

Accepted Answer

A) $5 
B) $10 
C) $20 
D) $25 
E) $50 
A) $5 
B) $10 
C) $20 
D) $25 
E) $50

Question 12

A 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

Which one of the following statements is true?

Accepted Answer

A) Investors should put all of their "eggs in one basket." 
B) Individuals can ignore their tolerance for risk when selecting specific investments. 
C) Diversification is one way to increase your risk. 
D) The amount of time a specific investment has to work is an important factor when managing an investment. 
E) Younger investors tend to invest a large percentage of their portfolio in income-producing securities. 
A) Investors should put all of their "eggs in one basket." 
B) Individuals can ignore their tolerance for risk when selecting specific investments. 
C) Diversification is one way to increase your risk. 
D) The amount of time a specific investment has to work is an important factor when managing an investment. 
E) Younger investors tend to invest a large percentage of their portfolio in income-producing securities.

Question 14

Although useful for many things,the Internet cannot be used to monitor the value of stock,bond,and mutual fund investments.

Accepted Answer

A) True 
 B)False

Question 15

All except which one of the following are good ways to acquire money for starting an investment program?

Accepted Answer

A) Pay bills first, and then save a reasonable amount of money for investment 
B) Participate in an elective savings program 
C) Make a special savings effort one month per year 
D) Borrow money specifically for investment purposes 
E) Take advantage of an employer-sponsored retirement program 
A) Pay bills first, and then save a reasonable amount of money for investment 
B) Participate in an elective savings program 
C) Make a special savings effort one month per year 
D) Borrow money specifically for investment purposes 
E) Take advantage of an employer-sponsored retirement program

Question 16

Which one of the following statements is true?

Accepted Answer

A) Global investments must be evaluated just like domestic investments. 
B) Global investments can only be bought in the U.S. 
C) Today, very few investors are investing in stocks and bonds issued by foreign firms or in global mutual funds. 
D) For most small investors, it makes more sense to invest in foreign firms, rather than in global mutual funds. 
E) Investing in global investments does not diversify your portfolio. 
A) Global investments must be evaluated just like domestic investments. 
B) Global investments can only be bought in the U.S. 
C) Today, very few investors are investing in stocks and bonds issued by foreign firms or in global mutual funds. 
D) For most small investors, it makes more sense to invest in foreign firms, rather than in global mutual funds. 
E) Investing in global investments does not diversify your portfolio.

Question 17

John Hernandez is 24 years old 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 years old.Which one of the investment factors listed below would be most important for an investor like Mr.Hernandez?

Accepted Answer

A) Beta 
B) Income 
C) Growth 
D) Risk 
E) Liquidity 
A) Beta 
B) Income 
C) Growth 
D) Risk 
E) Liquidity

Question 18

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

Accepted Answer

A) True 
 B)False

Question 19

Standard & Poor's and Value Line are companies that would be examples of:

Accepted Answer

A) stockbrokers. 
B) securities exchanges. 
C) stock regulations. 
D) investor services. 
E) stock underwriters. 
A) stockbrokers. 
B) securities exchanges. 
C) stock regulations. 
D) investor services. 
E) stock underwriters.

Question 20

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

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

If interest rates in the overall economy increase to 8 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.

Which one of the following investments would provide the most predictable source of income?

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.What is he doing to obtain the money for investing?

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 appreciating by about 10% over the last several years.What aspect of investing interests Brenda?

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

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

The ability of an investment to be converted to cash without a substantial loss in dollar value is called:

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

James Gripka has a mutual fund that automatically takes $50 out of his paycheck each month.Which suggestion for obtaining the money he needs for investing is he following?

If a $1,000 bond pays 5% interest each year,how much would each semiannual interest payment be?

A 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.

Which one of the following statements is true?

Although useful for many things,the Internet cannot be used to monitor the value of stock,bond,and mutual fund investments.

All except which one of the following are good ways to acquire money for starting an investment program?

Which one of the following statements is true?

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

Standard & Poor's and Value Line are companies that would be examples of:

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

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

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

If interest rates in the overall economy increase to 8 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.

Which one of the following investments would provide the most predictable source of income?

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.What is he doing to obtain the money for investing?

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 appreciating by about 10% over the last several years.What aspect of investing interests Brenda?

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

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

The ability of an investment to be converted to cash without a substantial loss in dollar value is called:

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

James Gripka has a mutual fund that automatically takes $50 out of his paycheck each month.Which suggestion for obtaining the money he needs for investing is he following?

If a $1,000 bond pays 5% interest each year,how much would each semiannual interest payment be?

A 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.

Which one of the following statements is true?

Although useful for many things,the Internet cannot be used to monitor the value of stock,bond,and mutual fund investments.

All except which one of the following are good ways to acquire money for starting an investment program?

Which one of the following statements is true?

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

Standard & Poor's and Value Line are companies that would be examples of:

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

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