Question 1

Smart investors can find investments that generate high rates of returns with small amounts of risk.

Accepted Answer

A) True 
 B)False

Question 2

The best way to ensure that you will receive dividends is to

Accepted Answer

A) day trade. 
B) purchase bonds. 
C) purchase common stock. 
D) purchase preferred stock. 
A) day trade. 
B) purchase bonds. 
C) purchase common stock. 
D) purchase preferred stock.

Question 3

If you believe that a firm will grow rapidly in the future,you should buy its

Accepted Answer

A) bonds. 
B) notes. 
C) common stock. 
D) preferred stock. 
A) bonds. 
B) notes. 
C) common stock. 
D) preferred stock.

Question 4

Individuals who buy and sell stock on a very short-term basis as a career are called ________.

Accepted Answer

The answer of Individuals who buy and sell stock on...

Question 5

Before you start an investment program,you should ensure liquidity by having money in financial institutions or in money market securities.

Accepted Answer

A) True 
 B)False

Question 6

Mutual fund gains can be in the form of dividends or capital gains,which are passed on to the individual investors.

Accepted Answer

A) True 
 B)False

Question 7

What would be the return on 200 shares of stock purchased on January 1,2005 for $60 per share and sold on December 31,2005 at $80 per share? Also assume that the company paid dividends of $2 per share over the year.The prices include all brokerage fees.Round to the nearest whole percent.
(a)37%
(b)25%
(c)33%
(d)40%

Accepted Answer

(a)[(80 -

Question 8

Of the following statements about a day trader,which is not correct?

Accepted Answer

A) They have a short-term focus. 
B) They may buy and sell on the same day. 
C) They are more risk averse than most investors. 
D) Day trading may be their career. 
A) They have a short-term focus. 
B) They may buy and sell on the same day. 
C) They are more risk averse than most investors. 
D) Day trading may be their career.

Question 9

What would be the return on a stock purchased at $20 per share,held for 5 years,and sold for $32.22? Ignore brokerage commissions and tax implications and assume the stock paid no dividends during the holding period.Round to the nearest whole percent if necessary.
(a)3%
(b)10%
(c)15%
(d)16%

Accepted Answer

(b)$32.22/$20 = 1.611 Referrin

Question 10

Common stock is not

Accepted Answer

A) issued by every firm that issues stock. 
B) riskier than preferred stock. 
C) given voting rights. 
D) guaranteed a dividend. 
A) issued by every firm that issues stock. 
B) riskier than preferred stock. 
C) given voting rights. 
D) guaranteed a dividend.

Question 11

Institutional investors are professionals employed by a financial institution,who invest their own money earned from their jobs.

Accepted Answer

A) True 
 B)False

Question 12

Which of the following statements is not true regarding individual investors?

Accepted Answer

A) They commonly invest a portion of the money earned from their jobs. 
B) They invest in stocks to earn a reasonable return on their investments. 
C) They expect their money to grow by the time they wish to use it to make purchases. 
D) The number of individual investors has decreased in the last 20 years. 
A) They commonly invest a portion of the money earned from their jobs. 
B) They invest in stocks to earn a reasonable return on their investments. 
C) They expect their money to grow by the time they wish to use it to make purchases. 
D) The number of individual investors has decreased in the last 20 years.

Question 13

Of the following,which is not used in measuring a stock's return?

Accepted Answer

A) Price of the stock at time of purchase 
B) Average price of stock during period owned 
C) Price of stock at time of sale 
D) Dividends earned during period owned 
A) Price of the stock at time of purchase 
B) Average price of stock during period owned 
C) Price of stock at time of sale 
D) Dividends earned during period owned

Question 14

The primary market is used by firms to raise funds and is a market where newly issued securities are traded.

Accepted Answer

A) True 
 B)False

Question 15

Which of the following is not true regarding mutual funds?

Accepted Answer

A) There are thousands of funds with many different investing objectives. 
B) They offer small investors diversification and professional management. 
C) Dividends received from their investments are used to pay operational expenses,and capital gains are passed on to the mutual fund shareowners. 
D) Both dividends and gains are distributed to mutual fund shareowners. 
A) There are thousands of funds with many different investing objectives. 
B) They offer small investors diversification and professional management. 
C) Dividends received from their investments are used to pay operational expenses,and capital gains are passed on to the mutual fund shareowners. 
D) Both dividends and gains are distributed to mutual fund shareowners.

Question 16

The Internet should be used for all of the following except

Accepted Answer

A) company financial statements. 
B) specific recommendation on which stocks to buy. 
C) stock prices. 
D) analysis of stocks and industries. 
A) company financial statements. 
B) specific recommendation on which stocks to buy. 
C) stock prices. 
D) analysis of stocks and industries.

Question 17

Since the gain received from the sale of stock is always taxed as ordinary income,you might want to time your sale to shift your profit from one year to another.

Accepted Answer

A) True 
 B)False

Question 18

Describe how the decision to invest in stocks affects financial planning,liquidity management,financing,and protecting your wealth.

Accepted Answer

Stocks are part of the investment plan a

Question 19

You have $10,000 to invest and would like to set these funds aside for retirement in 20 years.You should

Accepted Answer

A) put the money in a money market savings account. 
B) buy a one-year CD. 
C) buy stocks of relatively stable firms that have low risk. 
D) invest in a diversified stock mutual fund. 
A) put the money in a money market savings account. 
B) buy a one-year CD. 
C) buy stocks of relatively stable firms that have low risk. 
D) invest in a diversified stock mutual fund.

Question 20

The time value of money concepts do not include

Accepted Answer

A) interest or the cost of money. 
B) payments of principal and interest. 
C) present and future values. 
D) the risks associated with various investments. 
A) interest or the cost of money. 
B) payments of principal and interest. 
C) present and future values. 
D) the risks associated with various investments.

Smart investors can find investments that generate high rates of returns with small amounts of risk.

The best way to ensure that you will receive dividends is to

If you believe that a firm will grow rapidly in the future,you should buy its

Individuals who buy and sell stock on a very short-term basis as a career are called ________.

Before you start an investment program,you should ensure liquidity by having money in financial institutions or in money market securities.

Mutual fund gains can be in the form of dividends or capital gains,which are passed on to the individual investors.

Of the following statements about a day trader,which is not correct?

What would be the return on a stock purchased at $20 per share,held for 5 years,and sold for $32.22? Ignore brokerage commissions and tax implications and assume the stock paid no dividends during the holding period.Round to the nearest whole percent if necessary. (a)3% (b)10% (c)15% (d)16%

Common stock is not

Institutional investors are professionals employed by a financial institution,who invest their own money earned from their jobs.

Which of the following statements is not true regarding individual investors?

Of the following,which is not used in measuring a stock's return?

The primary market is used by firms to raise funds and is a market where newly issued securities are traded.

Which of the following is not true regarding mutual funds?

The Internet should be used for all of the following except

Since the gain received from the sale of stock is always taxed as ordinary income,you might want to time your sale to shift your profit from one year to another.

Describe how the decision to invest in stocks affects financial planning,liquidity management,financing,and protecting your wealth.

You have $10,000 to invest and would like to set these funds aside for retirement in 20 years.You should

The time value of money concepts do not include

Overview of a Financial Plan

Planning With Personal Financial Statements

Applying Time Value Concepts

Using Tax Concepts for Planning

Banking and Interest Rates

Managing Your Money

Assessing and Securing Your Credit

Managing Your Credit

Personal Loans

Purchasing and Financing a Home

Auto and Homeowners Insurance

Health and Disability Insurance

Life Insurance

Investing in Stocks

Investing in Bonds

Investing in Mutual Funds

Asset Allocation

Retirement Planning

Estate Planning

Integrating the Components of a Financial Plan

Filters

Exam 14: Investing Fundamentals

Smart investors can find investments that generate high rates of returns with small amounts of risk.

The best way to ensure that you will receive dividends is to

If you believe that a firm will grow rapidly in the future,you should buy its

Individuals who buy and sell stock on a very short-term basis as a career are called ________.

Before you start an investment program,you should ensure liquidity by having money in financial institutions or in money market securities.

Mutual fund gains can be in the form of dividends or capital gains,which are passed on to the individual investors.

Of the following statements about a day trader,which is not correct?

What would be the return on a stock purchased at $20 per share,held for 5 years,and sold for $32.22? Ignore brokerage commissions and tax implications and assume the stock paid no dividends during the holding period.Round to the nearest whole percent if necessary. (a)3% (b)10% (c)15% (d)16%

Common stock is not

Institutional investors are professionals employed by a financial institution,who invest their own money earned from their jobs.

Which of the following statements is not true regarding individual investors?

Of the following,which is not used in measuring a stock's return?

The primary market is used by firms to raise funds and is a market where newly issued securities are traded.

Which of the following is not true regarding mutual funds?

The Internet should be used for all of the following except

Since the gain received from the sale of stock is always taxed as ordinary income,you might want to time your sale to shift your profit from one year to another.

Describe how the decision to invest in stocks affects financial planning,liquidity management,financing,and protecting your wealth.

You have $10,000 to invest and would like to set these funds aside for retirement in 20 years.You should

The time value of money concepts do not include

Overview of a Financial Plan

Planning With Personal Financial Statements

Applying Time Value Concepts

Using Tax Concepts for Planning

Banking and Interest Rates

Managing Your Money

Assessing and Securing Your Credit

Managing Your Credit

Personal Loans

Purchasing and Financing a Home

Auto and Homeowners Insurance

Health and Disability Insurance

Life Insurance

Investing in Stocks

Investing in Bonds

Investing in Mutual Funds

Asset Allocation

Retirement Planning

Estate Planning

Integrating the Components of a Financial Plan

Filters