Question 1

For minimal tax consequences,when your stock increases in value it should be held for

Accepted Answer

A)  four months or longer. 
B)  over a year. 
C)  under a year. 
D)  five years or longer. 
A)  four months or longer. 
B)  over a year. 
C)  under a year. 
D)  five years or longer.

Question 2

When economic conditions are strong,the demand for most types of investments is low.

Accepted Answer

A) True 
 B)False

Question 3

Investors who buy and sell stock,sometimes in the same day,are called

Accepted Answer

A)  individual investors. 
B)  growth investors. 
C)  institutional investors. 
D)  day traders. 
A)  individual investors. 
B)  growth investors. 
C)  institutional investors. 
D)  day traders.

Question 4

Jane has $3,200 she wants to invest in stocks.She has found an investment that she believes will earn a 9% annual return.What will be the value of Jane's investment in 20 years if she is correct?

Accepted Answer

A)  $17,933 
B)  $16,512 
C)  $14,915 
D)  $21,526 
A)  $17,933 
B)  $16,512 
C)  $14,915 
D)  $21,526

Question 5

Assuming a tax rate on ordinary income of 25% and a long-term capital gain rate of 10%,how much would you pay in taxes if you sold stock "A" for a $200 capital gain after holding it for 5 months,stock "B" for a $300 capital gain after holding it for 8 months,and stock "C" for a $500 capital gain after holding it for 14 months?

Accepted Answer

A)  $250 
B)  $100 
C)  $130 
D)  $175 
A)  $250 
B)  $100 
C)  $130 
D)  $175

Question 6

Common stockholders have the right to vote on key corporate issues,but also have the last right to the assets or profits of a company.

Accepted Answer

A) True 
 B)False

Question 7

Name three applications of present and future value concepts to stocks.

Accepted Answer

Present value could be used to estimate

Question 8

The risk-return relationship means

Accepted Answer

A)  the lower the risk, the higher the return. 
B)  the higher the risk, the lower the return. 
C)  the higher the risk, the higher the return. 
D)  risk and return have little or no correlation. 
A)  the lower the risk, the higher the return. 
B)  the higher the risk, the lower the return. 
C)  the higher the risk, the higher the return. 
D)  risk and return have little or no correlation.

Question 9

A key reason for uncertainty surrounding the return on investment is the uncertainty surrounding the current economic conditions.

Accepted Answer

A) True 
 B)False

Question 10

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 11

Which of the following is an accurate statement?

Accepted Answer

A)  Owning common stock is less risky than owning real estate. 
B)  In times of rising inflation, it is safer to own bonds than common stock. 
C)  Owning common stock provides the investor with a share of the firm's earnings and potential dividends. 
D)  Owning preferred stock is more risky than owning common stock since the investor has voting rights with common stock and it stands before preferred stock in the event of bankruptcy. 
A)  Owning common stock is less risky than owning real estate. 
B)  In times of rising inflation, it is safer to own bonds than common stock. 
C)  Owning common stock provides the investor with a share of the firm's earnings and potential dividends. 
D)  Owning preferred stock is more risky than owning common stock since the investor has voting rights with common stock and it stands before preferred stock in the event of bankruptcy.

Question 12

In addition to the interest earned on a bond,it is also possible that the actual bond will increase in value over time.

Accepted Answer

A) True 
 B)False

Question 13

You have been given an overview of stocks,bonds,and mutual funds.Give one advantage and one disadvantage of investing in each of these.

Accepted Answer

Stocks-advantage: You may get a dividend

Question 14

Bonds are financial instruments representing partial ownership of a firm.

Accepted Answer

A) True 
 B)False

Question 15

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 16

If you wish to have the power to vote on who will serve on the board of directors of a corporation you will need to purchase shares of ________ in the corporation.

Accepted Answer

The answer of If you wish to have the power...

Question 17

Before you start to invest,you should ensure liquidity by owning

Accepted Answer

A)  individual stocks. 
B)  money market securities. 
C)  options and puts. 
D)  corporate bonds. 
A)  individual stocks. 
B)  money market securities. 
C)  options and puts. 
D)  corporate bonds.

Question 18

Use the following two columns of items to answer the matching questions below:
-institutional investors

Accepted Answer

A) first offering of a firm's stock to the public 
B) financial instruments that represent partial ownership of a firm 
C) investors owning this type of stock have priority over common stockholders in receiving dividends 
D) individual investors who buy and sell stocks within a day 
E) market where existing securities are sold
F)professionals responsible for clients' funds
G)facilities that allow investors to purchase or sell existing stocks
H)debt instruments issued by the government or corporations to borrow money from investors 
A) first offering of a firm's stock to the public 
B) financial instruments that represent partial ownership of a firm 
C) investors owning this type of stock have priority over common stockholders in receiving dividends 
D) individual investors who buy and sell stocks within a day 
E) market where existing securities are sold
F)professionals responsible for clients' funds
G)facilities that allow investors to purchase or sell existing stocks
H)debt instruments issued by the government or corporations to borrow money from investors

Question 19

Which of the following is true of an initial public offering (IPO)?

Accepted Answer

A)  Buying an IPO stock is less risky than purchasing established companies in the secondary market. 
B)  An IPO stock can be sold later in the primary market. 
C)  An IPO's stock price may rise or fall rapidly on the first day. 
D)  An IPO represents a company that was just created within the last month. 
A)  Buying an IPO stock is less risky than purchasing established companies in the secondary market. 
B)  An IPO stock can be sold later in the primary market. 
C)  An IPO's stock price may rise or fall rapidly on the first day. 
D)  An IPO represents a company that was just created within the last month.

Question 20

Which of the following is not true of common stock?

Accepted Answer

A)  Common stock represents partial ownership in the firm. 
B)  Common stock is riskier than preferred stock. 
C)  Investors in common stock are given voting rights. 
D)  Investors in common stock are guaranteed a dividend. 
A)  Common stock represents partial ownership in the firm. 
B)  Common stock is riskier than preferred stock. 
C)  Investors in common stock are given voting rights. 
D)  Investors in common stock are guaranteed a dividend.

For minimal tax consequences,when your stock increases in value it should be held for

When economic conditions are strong,the demand for most types of investments is low.

Investors who buy and sell stock,sometimes in the same day,are called

Jane has $3,200 she wants to invest in stocks.She has found an investment that she believes will earn a 9% annual return.What will be the value of Jane's investment in 20 years if she is correct?

Common stockholders have the right to vote on key corporate issues,but also have the last right to the assets or profits of a company.

Name three applications of present and future value concepts to stocks.

The risk-return relationship means

A key reason for uncertainty surrounding the return on investment is the uncertainty surrounding the current economic conditions.

The Internet should be used for all of the following except

Which of the following is an accurate statement?

In addition to the interest earned on a bond,it is also possible that the actual bond will increase in value over time.

You have been given an overview of stocks,bonds,and mutual funds.Give one advantage and one disadvantage of investing in each of these.

Bonds are financial instruments representing partial ownership of a firm.

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

If you wish to have the power to vote on who will serve on the board of directors of a corporation you will need to purchase shares of ________ in the corporation.

Before you start to invest,you should ensure liquidity by owning

Use the following two columns of items to answer the matching questions below: -institutional investors

Which of the following is true of an initial public offering (IPO)?

Which of the following is not true of common stock?

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

For minimal tax consequences,when your stock increases in value it should be held for

When economic conditions are strong,the demand for most types of investments is low.

Investors who buy and sell stock,sometimes in the same day,are called

Jane has $3,200 she wants to invest in stocks.She has found an investment that she believes will earn a 9% annual return.What will be the value of Jane's investment in 20 years if she is correct?

Common stockholders have the right to vote on key corporate issues,but also have the last right to the assets or profits of a company.

Name three applications of present and future value concepts to stocks.

The risk-return relationship means

A key reason for uncertainty surrounding the return on investment is the uncertainty surrounding the current economic conditions.

The Internet should be used for all of the following except

Which of the following is an accurate statement?

In addition to the interest earned on a bond,it is also possible that the actual bond will increase in value over time.

You have been given an overview of stocks,bonds,and mutual funds.Give one advantage and one disadvantage of investing in each of these.

Bonds are financial instruments representing partial ownership of a firm.

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

If you wish to have the power to vote on who will serve on the board of directors of a corporation you will need to purchase shares of ________ in the corporation.

Before you start to invest,you should ensure liquidity by owning

Use the following two columns of items to answer the matching questions below: -institutional investors

Which of the following is true of an initial public offering (IPO)?

Which of the following is not true of common stock?

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