Question 1

Which of the following features does not accurately describe a line of credit?

Accepted Answer

A) Credit line approved before the money is actually needed 
B) Funds available immediately when needed 
C) Obtainable from a credit union, savings and loan association, or bank 
D) It has a ceiling 
E) Long-term loan 
A) Credit line approved before the money is actually needed 
B) Funds available immediately when needed 
C) Obtainable from a credit union, savings and loan association, or bank 
D) It has a ceiling 
E) Long-term loan

Question 2

For a corporation,equity capital is provided by:

Accepted Answer

A) stockholders. 
B) lenders. 
C) bondholders. 
D) financial managers. 
E) government agencies. 
A) stockholders. 
B) lenders. 
C) bondholders. 
D) financial managers. 
E) government agencies.

Question 3

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

Question 4

The potential return on any investment should be directly related to the risk that the investor assumes.

Accepted Answer

A) True 
 B)False

Question 5

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

Accepted Answer

A) government securities. 
B) commodities. 
C) options. 
D) common stocks. 
E) speculative investments. 
A) government securities. 
B) commodities. 
C) options. 
D) common stocks. 
E) speculative investments.

Question 6

An example of ____________ risk occurs when the financial return on an investment does not keep up with prices that are increasing in the overall economy.

Accepted Answer

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

Question 7

Brokerage firms,investment companies,banks,and most corporations have a home page where you can obtain valuable investment information.

Accepted Answer

A) True 
 B)False

Question 8

Which of the following is not true of stocks?

Accepted Answer

A) Since the end of World War II, stocks have returned on average close to 10 percent a year. 
B) Since 1926, stocks had positive gains in 65 years. 
C) Since 1926, stocks lost money in 25 years. 
D) In 2009, during the economic crisis, stocks lost 37 percent. 
E) In reality, stocks do not have a place in every investment portfolio. 
A) Since the end of World War II, stocks have returned on average close to 10 percent a year. 
B) Since 1926, stocks had positive gains in 65 years. 
C) Since 1926, stocks lost money in 25 years. 
D) In 2009, during the economic crisis, stocks lost 37 percent. 
E) In reality, stocks do not have a place in every investment portfolio.

Question 9

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 and 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?

Accepted Answer

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

Question 10

What percentage of your assets should be invested in safer,more conservative investments according to many financial planners if you are 30 years of age?

Accepted Answer

A) 15% 
B) 30% 
C) 60% 
D) 70% 
E) 85% 
A) 15% 
B) 30% 
C) 60% 
D) 70% 
E) 85%

Question 11

The first step to creating an investment plan is to establish investment goals.

Accepted Answer

A) True 
 B)False

Question 12

A change in the value of stocks,bonds,or other investments due to political activity may cause investors to experience ____________ risk.

Accepted Answer

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

Question 13

Liquidity is the ability to buy or sell an investment quickly without substantially affecting the investment's value.

Accepted Answer

A) True 
 B)False

Question 14

Mike Lively is thinking about buying an investment that represents an ownership claim on a company.The most important priority he has with this investment is receiving his dividends before dividends are paid on other types of investments.What investment is Mike thinking about purchasing?

Accepted Answer

A) Common stock 
B) Preferred stock 
C) Corporate bond 
D) Option 
E) Mutual fund 
A) Common stock 
B) Preferred stock 
C) Corporate bond 
D) Option 
E) Mutual fund

Question 15

During periods of high inflation,there is a risk that the financial return on an investment will not keep pace with the rate of inflation.

Accepted Answer

A) True 
 B)False

Question 16

Equity capital is money:

Accepted Answer

A) obtained from the owners of a business. 
B) borrowed through banks. 
C) obtained by employee benefit programs. 
D) that has to be repaid. 
E) that has been allocated to a retirement program. 
A) obtained from the owners of a business. 
B) borrowed through banks. 
C) obtained by employee benefit programs. 
D) that has to be repaid. 
E) that has been allocated to a retirement program.

Question 17

Because of the age factor,older investors tend to be more conservative and invest in:

Accepted Answer

A) Speculative stocks. 
B) Commodities. 
C) Collectibles. 
D) Very safe corporate stocks. 
E) Options. 
A) Speculative stocks. 
B) Commodities. 
C) Collectibles. 
D) Very safe corporate stocks. 
E) Options.

Question 18

Accurate record keeping can help you spot opportunities to maximize profits or reduce dollar losses when you sell your investments.

Accepted Answer

A) True 
 B)False

Question 19

To avoid the financial problems associated with excessive credit card debt,you should:

Accepted Answer

A) Pay off your credit card balance in full each month 
B) Use your credit card to pay for small purchases 
C) Take advantage of the cash advance feature 
D) Use a large number of credit cards 
E) Avoid getting help if you think you are in trouble 
A) Pay off your credit card balance in full each month 
B) Use your credit card to pay for small purchases 
C) Take advantage of the cash advance feature 
D) Use a large number of credit cards 
E) Avoid getting help if you think you are in trouble

Question 20

Which of the following is a true statement?

Accepted Answer

A) To be useful, investment goals must be written. 
B) To be useful, investment goals must be very general. 
C) Investment goals are the same for each individual. 
D) Because investment goals deal with the future, it is useless to plan more than five years in the future. 
E) A long-term investment goal involves a time period of five years or less. 
A) To be useful, investment goals must be written. 
B) To be useful, investment goals must be very general. 
C) Investment goals are the same for each individual. 
D) Because investment goals deal with the future, it is useless to plan more than five years in the future. 
E) A long-term investment goal involves a time period of five years or less.

Which of the following features does not accurately describe a line of credit?

For a corporation,equity capital is provided by:

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?

The potential return on any investment should be directly related to the risk that the investor assumes.

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

An example of ____________ risk occurs when the financial return on an investment does not keep up with prices that are increasing in the overall economy.

Brokerage firms,investment companies,banks,and most corporations have a home page where you can obtain valuable investment information.

Which of the following is not true of stocks?

What percentage of your assets should be invested in safer,more conservative investments according to many financial planners if you are 30 years of age?

The first step to creating an investment plan is to establish investment goals.

A change in the value of stocks,bonds,or other investments due to political activity may cause investors to experience ____________ risk.

Liquidity is the ability to buy or sell an investment quickly without substantially affecting the investment's value.

Mike Lively is thinking about buying an investment that represents an ownership claim on a company.The most important priority he has with this investment is receiving his dividends before dividends are paid on other types of investments.What investment is Mike thinking about purchasing?

During periods of high inflation,there is a risk that the financial return on an investment will not keep pace with the rate of inflation.

Equity capital is money:

Because of the age factor,older investors tend to be more conservative and invest in:

Accurate record keeping can help you spot opportunities to maximize profits or reduce dollar losses when you sell your investments.

To avoid the financial problems associated with excessive credit card debt,you should:

Which of the following is a true statement?

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 of the following features does not accurately describe a line of credit?

For a corporation,equity capital is provided by:

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?

The potential return on any investment should be directly related to the risk that the investor assumes.

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

An example of ____________ risk occurs when the financial return on an investment does not keep up with prices that are increasing in the overall economy.

Brokerage firms,investment companies,banks,and most corporations have a home page where you can obtain valuable investment information.

Which of the following is not true of stocks?

What percentage of your assets should be invested in safer,more conservative investments according to many financial planners if you are 30 years of age?

The first step to creating an investment plan is to establish investment goals.

A change in the value of stocks,bonds,or other investments due to political activity may cause investors to experience ____________ risk.

Liquidity is the ability to buy or sell an investment quickly without substantially affecting the investment's value.

Mike Lively is thinking about buying an investment that represents an ownership claim on a company.The most important priority he has with this investment is receiving his dividends before dividends are paid on other types of investments.What investment is Mike thinking about purchasing?

During periods of high inflation,there is a risk that the financial return on an investment will not keep pace with the rate of inflation.

Equity capital is money:

Because of the age factor,older investors tend to be more conservative and invest in:

Accurate record keeping can help you spot opportunities to maximize profits or reduce dollar losses when you sell your investments.

To avoid the financial problems associated with excessive credit card debt,you should:

Which of the following is a true statement?

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