Question 1

During inflationary times,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 2

Once you have made a decision to buy an investment,there is no need for continued evaluation.

Accepted Answer

A) True 
 B)False

Question 3

Which one of the following would not be considered a safe investment for a conservative investor?

Accepted Answer

A) corporate bonds 
B) certificates of deposit 
C) passbook savings accounts 
D) blue-chip stocks 
E) collectibles 
A) corporate bonds 
B) certificates of deposit 
C) passbook savings accounts 
D) blue-chip stocks 
E) collectibles

Question 4

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 5

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) preferred stock 
A) checking account 
B) government bond 
C) real estate 
D) savings account 
E) preferred stock

Question 6

A line of credit is a short-term loan that is approved before the money is actually needed.

Accepted Answer

A) True 
 B)False

Question 7

Bill Teague has just gotten a gift of $20,000 from his parents and is trying to decide how to invest it.He is thinking about investing in a money market mutual fund because he knows he can withdraw the money from the money market mutual fund whenever he needs it with little chance of loss in value.What aspect of investing is Bill 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 8

A decrease in the value of stocks,bonds,or other investments 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 9

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 10

When investing in global investments,changes in the currency exchange rate may affect the return on your investment.

Accepted Answer

A) True 
 B)False

Question 11

John Hernandez is 24 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.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 12

An emergency fund should be deposited in a:

Accepted Answer

A) savings account at the highest available interest rate. 
B) six-month certificate of deposit. 
C) checking account. 
D) safe place at home. 
E) safe deposit box in a bank vault. 
A) savings account at the highest available interest rate. 
B) six-month certificate of deposit. 
C) checking account. 
D) safe place at home. 
E) safe deposit box in a bank vault.

Question 13

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

Accepted Answer

A) True 
 B)False

Question 14

Which one of the following investments would rank the highest with regard to safety?

Accepted Answer

A) government bond 
B) common stock 
C) preferred stock 
D) corporate bond 
E) real estate 
A) government bond 
B) common stock 
C) preferred stock 
D) corporate bond 
E) real estate

Question 15

Which one of the following is the most readily available source of current price information for an investment in stocks or bonds?

Accepted Answer

A) daily newspaper 
B) government publications 
C) corporate reports 
D) investor newsletters 
E) business periodicals 
A) daily newspaper 
B) government publications 
C) corporate reports 
D) investor newsletters 
E) business periodicals

Question 16

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 17

Lester McCann wants to invest but is worried about risk.In particular,he is worried that the money he invests today will not buy as much ten years from now.What type of risk concerns Lester?

Accepted Answer

A) inflation 
B) interest rate risk 
C) business failure 
D) market 
E) global investment 
A) inflation 
B) interest rate risk 
C) business failure 
D) market 
E) global investment

Question 18

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 19

Which one of the following is a true statement?

Accepted Answer

A) When choosing an investment,it is not necessary to consider the risk factor. 
B) During inflationary times,there is a risk that the financial return on an investment will not keep pace with the rate of inflation. 
C) The interest rate risk associated with investments in bonds is the result of changes in business conditions faced by companies. 
D) The risk of business failure deals with changes in the value of stocks and bonds due to changes in interest rates in the market. 
E) The prices of stocks,bonds,and other investments never fluctuate in the market. 
A) When choosing an investment,it is not necessary to consider the risk factor. 
B) During inflationary times,there is a risk that the financial return on an investment will not keep pace with the rate of inflation. 
C) The interest rate risk associated with investments in bonds is the result of changes in business conditions faced by companies. 
D) The risk of business failure deals with changes in the value of stocks and bonds due to changes in interest rates in the market. 
E) The prices of stocks,bonds,and other investments never fluctuate in the market.

Question 20

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.

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

Once you have made a decision to buy an investment,there is no need for continued evaluation.

Which one of the following would not be considered a safe investment for a conservative investor?

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

Which one of the following investments offers the least liquidity?

A line of credit is a short-term loan that is approved before the money is actually needed.

A decrease in the value of stocks,bonds,or other investments may cause investors to experience ____________ risk.

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

When investing in global investments,changes in the currency exchange rate may affect the return on your investment.

An emergency fund should be deposited in a:

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

Which one of the following investments would rank the highest with regard to safety?

Which one of the following is the most readily available source of current price information for an investment in stocks or bonds?

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?

Lester McCann wants to invest but is worried about risk.In particular,he is worried that the money he invests today will not buy as much ten years from now.What type of risk concerns Lester?

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?

Which one of the following is a true statement?

Normally,corporate bondholders receive interest:

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

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

Once you have made a decision to buy an investment,there is no need for continued evaluation.

Which one of the following would not be considered a safe investment for a conservative investor?

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

Which one of the following investments offers the least liquidity?

A line of credit is a short-term loan that is approved before the money is actually needed.

A decrease in the value of stocks,bonds,or other investments may cause investors to experience ____________ risk.

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

When investing in global investments,changes in the currency exchange rate may affect the return on your investment.

An emergency fund should be deposited in a:

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

Which one of the following investments would rank the highest with regard to safety?

Which one of the following is the most readily available source of current price information for an investment in stocks or bonds?

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?

Lester McCann wants to invest but is worried about risk.In particular,he is worried that the money he invests today will not buy as much ten years from now.What type of risk concerns Lester?

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?

Which one of the following is a true statement?

Normally,corporate bondholders receive interest:

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