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

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 3

Based on historical performance,which one of the following investments is most apt to provide an average return of 10 percent a year between now and the year 2025?

Accepted Answer

A) U.S.Treasury bills 
B) corporate bonds 
C) stocks 
D) options 
E) zero-coupon bonds 
A) U.S.Treasury bills 
B) corporate bonds 
C) stocks 
D) options 
E) zero-coupon bonds

Question 4

A corporation must give each potential investor an annual report.

Accepted Answer

A) True 
 B)False

Question 5

Carl Reimer has just received an inheritance of $40,000 from his mother and is trying to decide how to invest it.Carl is young and earns a good salary.Carl wants to invest in a small cap mutual fund.While he won't receive much in the way of cash dividends,the companies are reinvesting significant amounts so the sales revenue and earnings in the future will be much larger.What aspect of investing is Carl 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 6

If interest rates in the overall economy decrease,what will happen to the market value of a corporate bond with a fixed interest rate?

Accepted Answer

A) The bond will lose all its value. 
B) The value of the bond will increase. 
C) The value of the bond will decrease. 
D) The value of the bond will not change. 
E) It is impossible to determine if the bond's value will increase,decrease,or remain constant. 
A) The bond will lose all its value. 
B) The value of the bond will increase. 
C) The value of the bond will decrease. 
D) The value of the bond will not change. 
E) It is impossible to determine if the bond's value will increase,decrease,or remain constant.

Question 7

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) A search engine is a research tool that helps you find the investment information you want. 
E) Both government and businesses provide individuals with 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) A search engine is a research tool that helps you find the investment information you want. 
E) Both government and businesses provide individuals with investment information.

Question 8

A firm is short on cash.Which of the following would be paid first?

Accepted Answer

A) dividends to common stock owners. 
B) cash to buy shares of stock from shareholders. 
C) cash to buy bonds from current bondholders. 
D) interest to bond owners. 
E) dividends to preferred stock owners. 
A) dividends to common stock owners. 
B) cash to buy shares of stock from shareholders. 
C) cash to buy bonds from current bondholders. 
D) interest to bond owners. 
E) dividends to preferred stock owners.

Question 9

Which one of the following is a true statement?

Accepted Answer

A) It is not possible to overpay for real estate. 
B) Location is the least important factor when making a real estate investment. 
C) There are many factors to consider before investing in real estate. 
D) There is no reason to evaluate a real estate investment because real estate always increases in value sooner or later. 
E) Finding a buyer for a piece of real estate is always easy. 
A) It is not possible to overpay for real estate. 
B) Location is the least important factor when making a real estate investment. 
C) There are many factors to consider before investing in real estate. 
D) There is no reason to evaluate a real estate investment because real estate always increases in value sooner or later. 
E) Finding a buyer for a piece of real estate is always easy.

Question 10

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 11

Generally,options are conservative,long-term investment techniques.

Accepted Answer

A) True 
 B)False

Question 12

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 13

A speculative investment is an 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 14

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 15

Which of the following is a true statement?

Accepted Answer

A) A corporation generally obtains equity capital from bondholders. 
B) A corporation must issue either preferred stock or common stock but not both. 
C) When a corporation is experiencing financial problems,an investor should purchase common rather than preferred stock. 
D) Most corporations sell options to satisfy a large part of their financing needs. 
E) A stock split may not cause a stock's value to increasE. 
A) A corporation generally obtains equity capital from bondholders. 
B) A corporation must issue either preferred stock or common stock but not both. 
C) When a corporation is experiencing financial problems,an investor should purchase common rather than preferred stock. 
D) Most corporations sell options to satisfy a large part of their financing needs. 
E) A stock split may not cause a stock's value to increasE.

Question 16

Which one of the following investments offers the greatest growth potential?

Accepted Answer

A) bank accounts 
B) common stock 
C) corporate bonds 
D) government bonds 
E) options 
A) bank accounts 
B) common stock 
C) corporate bonds 
D) government bonds 
E) options

Question 17

Matt Jackson is single and 24.He has just graduated from college and obtained a job making $26,400 a year.Which one of the following investments would you recommend for his long-term investment program?

Accepted Answer

A) corporate bonds 
B) government bonds 
C) growth stocks 
D) commodities 
E) money-market fund 
A) corporate bonds 
B) government bonds 
C) growth stocks 
D) commodities 
E) money-market fund

Question 18

Bad products or poor corporate management may result in investors experiencing ______________ risk.

Accepted Answer

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

Question 19

Because of the age factor,most young investors tend to invest a large percentage of their nest egg in growth-oriented investments.

Accepted Answer

A) True 
 B)False

Question 20

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) contact banks and credit card companies if you are unable to make payments 
D) pay off credit cards 
E) seek cheaper alternatives to frequently purchased items 
A) establish a smaller than usual emergency fund 
B) consider converting investments to cash to preserve value 
C) contact banks and credit card companies if you are unable to make payments 
D) pay off credit cards 
E) seek cheaper alternatives to frequently purchased items

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

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

Based on historical performance,which one of the following investments is most apt to provide an average return of 10 percent a year between now and the year 2025?

A corporation must give each potential investor an annual report.

If interest rates in the overall economy decrease,what will happen to the market value of a corporate bond with a fixed interest rate?

Which one of the following is false?

A firm is short on cash.Which of the following would be paid first?

Which one of the following is a true statement?

Generally,options are conservative,long-term investment techniques.

Equity capital is money:

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

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

Which of the following is a true statement?

Which one of the following investments offers the greatest growth potential?

Matt Jackson is single and 24.He has just graduated from college and obtained a job making $26,400 a year.Which one of the following investments would you recommend for his long-term investment program?

Bad products or poor corporate management may result in investors experiencing ______________ risk.

Because of the age factor,most young investors tend to invest a large percentage of their nest egg in growth-oriented investments.

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

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

Exam 13: Investing Fundamentals

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

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

Based on historical performance,which one of the following investments is most apt to provide an average return of 10 percent a year between now and the year 2025?

A corporation must give each potential investor an annual report.

If interest rates in the overall economy decrease,what will happen to the market value of a corporate bond with a fixed interest rate?

Which one of the following is false?

A firm is short on cash.Which of the following would be paid first?

Which one of the following is a true statement?

Generally,options are conservative,long-term investment techniques.

Equity capital is money:

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

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

Which of the following is a true statement?

Which one of the following investments offers the greatest growth potential?

Matt Jackson is single and 24.He has just graduated from college and obtained a job making $26,400 a year.Which one of the following investments would you recommend for his long-term investment program?

Bad products or poor corporate management may result in investors experiencing ______________ risk.

Because of the age factor,most young investors tend to invest a large percentage of their nest egg in growth-oriented investments.

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

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