Question 1

Young investors are often more interested in ______ investments than are older investors.

Accepted Answer

A)  growth-oriented 
B)  government bond 
C)  cash 
D)  conservative 
E)  High quality corporate bonds 
A)  growth-oriented 
B)  government bond 
C)  cash 
D)  conservative 
E)  High quality corporate bonds

Question 2

To investors, liquidity means their investments will increase in value.

Accepted Answer

A) True 
 B)False

Question 3

The taxable equivalent yield for a municipal bond will be lower than the tax-exempt yield for that bond.

Accepted Answer

A) True 
 B)False

Question 4

The usual face value of a corporate bond is $100.

Accepted Answer

A) True 
 B)False

Question 5

The financially independent firm or individual that acts as the bondholders' representative is the

Accepted Answer

A)  Chairman of the board. 
B)  President of the corporation. 
C)  Debenture holder. 
D)  Indenture holder. 
E)  Trustee. 
A)  Chairman of the board. 
B)  President of the corporation. 
C)  Debenture holder. 
D)  Indenture holder. 
E)  Trustee.

Question 6

An emergency fund is an amount of money you can obtain quickly in case of immediate need.

Accepted Answer

A) True 
 B)False

Question 7

If you can leave your funds alone for 5-10 years or more, which of the following investments would be most appropriate?

Accepted Answer

A)  Cash 
B)  Certificates of deposit 
C)  Short-term government bonds 
D)  Highly rated corporate bonds 
E)  Stocks and mutual funds 
A)  Cash 
B)  Certificates of deposit 
C)  Short-term government bonds 
D)  Highly rated corporate bonds 
E)  Stocks and mutual funds

Question 8

If overall interest rates in the economy rise, a corporate bond with a fixed interest rate will generally

Accepted Answer

A)  Increase in value. 
B)  Decrease in value. 
C)  Remain unchanged. 
D)  Become worthless. 
E)  Be returned to the corporation. 
A)  Increase in value. 
B)  Decrease in value. 
C)  Remain unchanged. 
D)  Become worthless. 
E)  Be returned to the corporation.

Question 9

Since 1926, stocks have earned an average annual return of almost 10%.

Accepted Answer

A) True 
 B)False

Question 10

Regarding older investors, which of the following holds true for most?

Accepted Answer

A)  They choose investments with higher risks. 
B)  Their choices of investments do not change. 
C)  They choose investments with less risk. 
D)  They choose investments with no risk. 
E)  They move all of their money into a savings account. 
A)  They choose investments with higher risks. 
B)  Their choices of investments do not change. 
C)  They choose investments with less risk. 
D)  They choose investments with no risk. 
E)  They move all of their money into a savings account.

Question 11

To survive a crisis, you can take the following steps:

Accepted Answer

A)  establish a larger than usual emergency fund 
B)  know what you owe and reduce your spending 
C)  notify your lenders if you are unable to make payments 
D)  monitor the value of your investment and retirement accounts 
E)  All of the above 
A)  establish a larger than usual emergency fund 
B)  know what you owe and reduce your spending 
C)  notify your lenders if you are unable to make payments 
D)  monitor the value of your investment and retirement accounts 
E)  All of the above

Question 12

A corporation issuing bonds appoints a trustee to represent bondholders, because corporate bond indentures are very difficult for the average person to read and understand.

Accepted Answer

A) True 
 B)False

Question 13

According to some financial experts like Suze Orman, how much of an investment program should a 30-year-old have in safe (nongrowth) investments?

Accepted Answer

A)  20% 
B)  30% 
C)  70% 
D)  80% 
E)  100% 
A)  20% 
B)  30% 
C)  70% 
D)  80% 
E)  100%

Question 14

Considering your role in the investment process, it is important to let the investments manage themselves after you invest.

Accepted Answer

A) True 
 B)False

Question 15

A U.S. government security issued in minimum units of $100 with 4, 13, 26, or 52-week maturities is called a

Accepted Answer

A)  Subordinated bond. 
B)  Treasury bill. 
C)  Treasury note. 
D)  Treasury bond. 
E)  Savings bond. 
A)  Subordinated bond. 
B)  Treasury bill. 
C)  Treasury note. 
D)  Treasury bond. 
E)  Savings bond.

Question 16

When monitoring the value of your stock investments, it is important to

Accepted Answer

A)  Wait until you sell them to determine their value. 
B)  Track the prices in the December copy of a financial magazine. 
C)  Estimate their values based on similar stocks. 
D)  Determine their values using the price quotations reported on the Internet and in newspapers. 
E)  Assume that the values remain the same as long as you hold them. 
A)  Wait until you sell them to determine their value. 
B)  Track the prices in the December copy of a financial magazine. 
C)  Estimate their values based on similar stocks. 
D)  Determine their values using the price quotations reported on the Internet and in newspapers. 
E)  Assume that the values remain the same as long as you hold them.

Question 17

Market risk is associated with some investments and indicates that periods of economic expansion are followed by periods of recession.

Accepted Answer

A) True 
 B)False

Question 18

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

Accepted Answer

A) True 
 B)False

Question 19

To maximize profit or reduce dollar losses when you sell your investments, it is important to do all of the following except

Accepted Answer

A)  Keep purchase records of actual dollar costs. 
B)  Keep accurate records to help you spot opportunities for when to sell. 
C)  Identify and document commissions or fees paid. 
D)  Keep a list of sources of information (such as Internet addresses) for reference. 
E)  Identify the actual dollar cost of the investments after you sell them. 
A)  Keep purchase records of actual dollar costs. 
B)  Keep accurate records to help you spot opportunities for when to sell. 
C)  Identify and document commissions or fees paid. 
D)  Keep a list of sources of information (such as Internet addresses) for reference. 
E)  Identify the actual dollar cost of the investments after you sell them.

Question 20

At the most, you should keep only purchase records of the actual dollar cost of your investments.

Accepted Answer

A) True 
 B)False

Young investors are often more interested in ______ investments than are older investors.

To investors, liquidity means their investments will increase in value.

The taxable equivalent yield for a municipal bond will be lower than the tax-exempt yield for that bond.

The usual face value of a corporate bond is $100.

The financially independent firm or individual that acts as the bondholders' representative is the

An emergency fund is an amount of money you can obtain quickly in case of immediate need.

If you can leave your funds alone for 5-10 years or more, which of the following investments would be most appropriate?

If overall interest rates in the economy rise, a corporate bond with a fixed interest rate will generally

Since 1926, stocks have earned an average annual return of almost 10%.

Regarding older investors, which of the following holds true for most?

To survive a crisis, you can take the following steps:

A corporation issuing bonds appoints a trustee to represent bondholders, because corporate bond indentures are very difficult for the average person to read and understand.

According to some financial experts like Suze Orman, how much of an investment program should a 30-year-old have in safe (nongrowth) investments?

Considering your role in the investment process, it is important to let the investments manage themselves after you invest.

A U.S. government security issued in minimum units of $100 with 4, 13, 26, or 52-week maturities is called a

When monitoring the value of your stock investments, it is important to

Market risk is associated with some investments and indicates that periods of economic expansion are followed by periods of recession.

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

To maximize profit or reduce dollar losses when you sell your investments, it is important to do all of the following except

At the most, you should keep only purchase records of the actual dollar cost of your investments.

Personal Financial Planning in Action

Money Management Skills

Taxes in Your Financial Plan

Financial Services: Saving Plans and Payment Accounts

Consumer Credit: Advantages, Disadvantages, Sources, and Costs

Consumer Purchasing Strategies and Wise Buying of Motor Vehicles

Selecting and Financing Housing

Home and Automobile Insurance

Health and Disability Insurance

Financial Planning With Life Insurance

Investing in Stocks

Investing in Mutual Funds

Starting Early: Retirement and Estate Planning

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Exam 11: Investing Fundamentals and Bonds

Young investors are often more interested in ______ investments than are older investors.

To investors, liquidity means their investments will increase in value.

The taxable equivalent yield for a municipal bond will be lower than the tax-exempt yield for that bond.

The usual face value of a corporate bond is $100.

The financially independent firm or individual that acts as the bondholders' representative is the

An emergency fund is an amount of money you can obtain quickly in case of immediate need.

If you can leave your funds alone for 5-10 years or more, which of the following investments would be most appropriate?

If overall interest rates in the economy rise, a corporate bond with a fixed interest rate will generally

Since 1926, stocks have earned an average annual return of almost 10%.

Regarding older investors, which of the following holds true for most?

To survive a crisis, you can take the following steps:

A corporation issuing bonds appoints a trustee to represent bondholders, because corporate bond indentures are very difficult for the average person to read and understand.

According to some financial experts like Suze Orman, how much of an investment program should a 30-year-old have in safe (nongrowth) investments?

Considering your role in the investment process, it is important to let the investments manage themselves after you invest.

A U.S. government security issued in minimum units of $100 with 4, 13, 26, or 52-week maturities is called a

When monitoring the value of your stock investments, it is important to

Market risk is associated with some investments and indicates that periods of economic expansion are followed by periods of recession.

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

To maximize profit or reduce dollar losses when you sell your investments, it is important to do all of the following except

At the most, you should keep only purchase records of the actual dollar cost of your investments.

Personal Financial Planning in Action

Money Management Skills

Taxes in Your Financial Plan

Financial Services: Saving Plans and Payment Accounts

Consumer Credit: Advantages, Disadvantages, Sources, and Costs

Consumer Purchasing Strategies and Wise Buying of Motor Vehicles

Selecting and Financing Housing

Home and Automobile Insurance

Health and Disability Insurance

Financial Planning With Life Insurance

Investing in Stocks

Investing in Mutual Funds

Starting Early: Retirement and Estate Planning

Filters