Question 1

General Electric is the only stock originally listed and still remaining on the "Big Board." This means that its stock is traded on the

Accepted Answer

A) NASDAQ. 
B) NYSE. 
C) Regional. 
D) AMEX. 
E) International. 
A) NASDAQ. 
B) NYSE. 
C) Regional. 
D) AMEX. 
E) International. B

Question 2

Under the risk aversion effect,investors who lose money are more reluctant to take risks.

Accepted Answer

A) True 
 B)False  True

Question 3

An initial public offering is the first time the company's stock is traded publicly.

Accepted Answer

A) True 
 B)False  True

Question 4

Albert just purchased a $1,000,5.4%,10-year bond when he heard about his friend Charlie who just bought a equal quality bond at $1,000;9.5%,10-year bond.What kind of risk did Albert just experience?

Accepted Answer

A) Interest rate 
B) Market 
C) Financial 
D) Business 
A) Interest rate 
B) Market 
C) Financial 
D) Business

Question 5

How do interest rates affect returns on other investments?

Accepted Answer

The expected returns on all investments

Question 6

For individuals in their golden years who are approaching retirement,a mix of ________ percent common stocks and ________ percent bonds is a relatively common recommendation from financial planners.

Accepted Answer

A) 20;80 
B) 80;20 
C) 40;60 
D) 60;40 
E) none of the above 
A) 20;80 
B) 80;20 
C) 40;60 
D) 60;40 
E) none of the above

Question 7

When it comes to tax advantages,capital gains and dividend income are taxed at a lower rate than ordinary income.

Accepted Answer

A) True 
 B)False

Question 8

Typically,the closer you get to retirement,the smaller the proportion of your retirement funds that should be invested in common stocks.

Accepted Answer

A) True 
 B)False

Question 9

Provide an explanation of the four points of making a comparison of investing returns on an after-tax basis.

Accepted Answer

The tax rate we should be concerned with

Question 10

Jordan has a few thousand dollars to invest.He wants to find newly issued stock of a fast- growing new company.He will contact an underwriter and attempt to purchase the shares in the ________ market.

Accepted Answer

A) secondary 
B) New York Stock Exchange 
C) primary 
D) NASDAQ 
E) commodity 
A) secondary 
B) New York Stock Exchange 
C) primary 
D) NASDAQ 
E) commodity

Question 11

The ________ date is the date at which the bond issuer must repay the loan or borrowed funds.

Accepted Answer

A) premium 
B) ending 
C) completion 
D) maturity 
E) none of the above 
A) premium 
B) ending 
C) completion 
D) maturity 
E) none of the above

Question 12

If Facebook has an IPO in the primary market,who would receive the proceeds from the sale of the stock?

Accepted Answer

A) Investors 
B) NYSE 
C) Facebook 
D) ADR's 
A) Investors 
B) NYSE 
C) Facebook 
D) ADR's

Question 13

Sally is attempting to purchase 88 shares of Alphabet's stock.Sally is purchasing a(n)________ lot of stocks.

Accepted Answer

A) square 
B) round 
C) odd 
D) margin 
E) cannot determine from the information provided 
A) square 
B) round 
C) odd 
D) margin 
E) cannot determine from the information provided

Question 14

You have decided to borrow stock from your broker,sell it in the market,and then (you hope)replace the borrowed shares when the price drops in the future.This is an example of

Accepted Answer

A) borrowed selling. 
B) selling short. 
C) reverse hedging. 
D) IOU trading. 
E) none of the above. 
A) borrowed selling. 
B) selling short. 
C) reverse hedging. 
D) IOU trading. 
E) none of the above.

Question 15

Lavon has his money invested into an asset that has averaged the following returns the last three years: +22%,-8%,+13%.Most likely what type of asset is he invested in?

Accepted Answer

A) Corporate bonds 
B) Income producing real estate 
C) Gold coins 
D) Common stock 
A) Corporate bonds 
B) Income producing real estate 
C) Gold coins 
D) Common stock

Question 16

Which of the following statements regarding risk in investing is most correct?

Accepted Answer

A) Avoiding risk is the best strategy to accumulate wealth. 
B) It is most important to avoid risk during the early years,up to age 54. 
C) It is hard to achieve a positive real return by avoiding risk all together. 
D) Trying to avoid risk is an exercise in futility. 
A) Avoiding risk is the best strategy to accumulate wealth. 
B) It is most important to avoid risk during the early years,up to age 54. 
C) It is hard to achieve a positive real return by avoiding risk all together. 
D) Trying to avoid risk is an exercise in futility.

Question 17

Explain the concept of liquidity relating to personal financial planning.

Accepted Answer

Part of the risk-return tradeoff is the

Question 18

Which statement is true regarding overconfidence?

Accepted Answer

A) Overconfidence leads to trading too often. 
B) Overconfidence afflicts women more often than men,and it also leads women to trade too often. 
C) Overconfident investors think they can beat the market. 
D) Both A and C 
A) Overconfidence leads to trading too often. 
B) Overconfidence afflicts women more often than men,and it also leads women to trade too often. 
C) Overconfident investors think they can beat the market. 
D) Both A and C

Question 19

On average,just by chance,half of the stock market's investors will outperform the market and half will underperform the market.

Accepted Answer

A) True 
 B)False

Question 20

The higher your marginal tax bracket,the less attractive tax-free investments become.

Accepted Answer

A) True 
 B)False

General Electric is the only stock originally listed and still remaining on the "Big Board." This means that its stock is traded on the

Under the risk aversion effect,investors who lose money are more reluctant to take risks.

An initial public offering is the first time the company's stock is traded publicly.

Albert just purchased a $1,000,5.4%,10-year bond when he heard about his friend Charlie who just bought a equal quality bond at $1,000;9.5%,10-year bond.What kind of risk did Albert just experience?

How do interest rates affect returns on other investments?

For individuals in their golden years who are approaching retirement,a mix of percent common stocks and percent bonds is a relatively common recommendation from financial planners.

When it comes to tax advantages,capital gains and dividend income are taxed at a lower rate than ordinary income.

Typically,the closer you get to retirement,the smaller the proportion of your retirement funds that should be invested in common stocks.

Provide an explanation of the four points of making a comparison of investing returns on an after-tax basis.

Jordan has a few thousand dollars to invest.He wants to find newly issued stock of a fast- growing new company.He will contact an underwriter and attempt to purchase the shares in the ________ market.

The ________ date is the date at which the bond issuer must repay the loan or borrowed funds.

If Facebook has an IPO in the primary market,who would receive the proceeds from the sale of the stock?

Sally is attempting to purchase 88 shares of Alphabet's stock.Sally is purchasing a(n)________ lot of stocks.

You have decided to borrow stock from your broker,sell it in the market,and then (you hope)replace the borrowed shares when the price drops in the future.This is an example of

Lavon has his money invested into an asset that has averaged the following returns the last three years: +22%,-8%,+13%.Most likely what type of asset is he invested in?

Which of the following statements regarding risk in investing is most correct?

Explain the concept of liquidity relating to personal financial planning.

Which statement is true regarding overconfidence?

On average,just by chance,half of the stock market's investors will outperform the market and half will underperform the market.

The higher your marginal tax bracket,the less attractive tax-free investments become.

The Financial Planning Process

Measuring Your Financial Health and Making a Plan

Understanding and Appreciating the Time Value of Money

Tax Planning and Strategies

Cash or Liquid Asset Management

Using Credit Cards: the Role of Open Credit

Student and Consumer Loans: the Role of Planned Borrowing

The Home and Automobile Decision

Life and Health Insurance

Property and Liability Insurance

Investing in Stocks

Investing in Bonds and Other Alternatives

Mutual Funds: an Easy Way to Diversify

Retirement Planning

Estate Planning: Saving Your Heirs Money and Headaches

Financial Life Eventsfitting the Pieces Together

Filters

Exam 11: Investment Basics

General Electric is the only stock originally listed and still remaining on the "Big Board." This means that its stock is traded on the

Under the risk aversion effect,investors who lose money are more reluctant to take risks.

An initial public offering is the first time the company's stock is traded publicly.

Albert just purchased a $1,000,5.4%,10-year bond when he heard about his friend Charlie who just bought a equal quality bond at $1,000;9.5%,10-year bond.What kind of risk did Albert just experience?

How do interest rates affect returns on other investments?

For individuals in their golden years who are approaching retirement,a mix of ________ percent common stocks and ________ percent bonds is a relatively common recommendation from financial planners.

When it comes to tax advantages,capital gains and dividend income are taxed at a lower rate than ordinary income.

Typically,the closer you get to retirement,the smaller the proportion of your retirement funds that should be invested in common stocks.

Provide an explanation of the four points of making a comparison of investing returns on an after-tax basis.

Jordan has a few thousand dollars to invest.He wants to find newly issued stock of a fast- growing new company.He will contact an underwriter and attempt to purchase the shares in the ________ market.

The ________ date is the date at which the bond issuer must repay the loan or borrowed funds.

If Facebook has an IPO in the primary market,who would receive the proceeds from the sale of the stock?

Sally is attempting to purchase 88 shares of Alphabet's stock.Sally is purchasing a(n)________ lot of stocks.

You have decided to borrow stock from your broker,sell it in the market,and then (you hope)replace the borrowed shares when the price drops in the future.This is an example of

Lavon has his money invested into an asset that has averaged the following returns the last three years: +22%,-8%,+13%.Most likely what type of asset is he invested in?

Which of the following statements regarding risk in investing is most correct?

Explain the concept of liquidity relating to personal financial planning.

Which statement is true regarding overconfidence?

On average,just by chance,half of the stock market's investors will outperform the market and half will underperform the market.

The higher your marginal tax bracket,the less attractive tax-free investments become.

The Financial Planning Process

Measuring Your Financial Health and Making a Plan

Understanding and Appreciating the Time Value of Money

Tax Planning and Strategies

Cash or Liquid Asset Management

Using Credit Cards: the Role of Open Credit

Student and Consumer Loans: the Role of Planned Borrowing

The Home and Automobile Decision

Life and Health Insurance

Property and Liability Insurance

Investing in Stocks

Investing in Bonds and Other Alternatives

Mutual Funds: an Easy Way to Diversify

Retirement Planning

Estate Planning: Saving Your Heirs Money and Headaches

Financial Life Eventsfitting the Pieces Together

Filters

For individuals in their golden years who are approaching retirement,a mix of percent common stocks and percent bonds is a relatively common recommendation from financial planners.