Question 1

When you purchase an asset that generates a return,it is generally considered to be

Accepted Answer

A) an investment. 
B) speculation. 
C) a windfall. 
D) an expected returner. 
E) none of the above. 
A) an investment. 
B) speculation. 
C) a windfall. 
D) an expected returner. 
E) none of the above.

Question 2

If you are too conservative with your investments,they may not keep up with inflation.

Accepted Answer

A) True 
 B)False

Question 3

How does the time dimension of investing relate to the concept of liquidity?

Accepted Answer

Liquidity concerns the ability to liquid

Question 4

The New York Stock Exchange and the American Stock Exchange are considered regional stock exchanges.

Accepted Answer

A) True 
 B)False

Question 5

What does an effective asset allocation strategy provide to an investor?

Accepted Answer

A) An effective diversification strategy 
B) An opportunity to maximize their returns based on appropriate risk 
C) An opportunity to minimize their losses based on appropriate risk 
D) All of the above are correct 
E) All but A are correct. 
A) An effective diversification strategy 
B) An opportunity to maximize their returns based on appropriate risk 
C) An opportunity to minimize their losses based on appropriate risk 
D) All of the above are correct 
E) All but A are correct.

Question 6

Should the average investor consider using short selling techniques? Why or why not?

Accepted Answer

Given the fact that the long-term trend

Question 7

An individual investor should look for a stock broker who will churn their accounts for them.

Accepted Answer

A) True 
 B)False

Question 8

You purchased some stock last month for $50 per share.Today the stock closed at $80 per share.You would like to protect the profit that you have made on this stock but you really don't want to sell it in case it continues to rise in price.What should you do?

Accepted Answer

A) Place a market order on this stock 
B) Place a stop-loss order on this stock 
C) Place a protect order on this stock 
D) None of the above 
A) Place a market order on this stock 
B) Place a stop-loss order on this stock 
C) Place a protect order on this stock 
D) None of the above

Question 9

Insider trading is both unfair and illegal.It occurs when officers,directors,major stockholders,or others trade securities while

Accepted Answer

A) intoxicated. 
B) in prison. 
C) in possession of illegal drugs. 
D) in possession of "material" nonpublic security information. 
E) having relatives working at the firm whose stock they are trading. 
A) intoxicated. 
B) in prison. 
C) in possession of illegal drugs. 
D) in possession of "material" nonpublic security information. 
E) having relatives working at the firm whose stock they are trading.

Question 10

You have just purchased a large number of Italian bonds,and you reside in the United States.The variability in earnings that you might experience as the relationship between the euro and the U.S.dollar fluctuates is called

Accepted Answer

A) currency volatility risk. 
B) international risk. 
C) exchange rate risk. 
D) fluctuation risk. 
E) none of the above. 
A) currency volatility risk. 
B) international risk. 
C) exchange rate risk. 
D) fluctuation risk. 
E) none of the above.

Question 11

Which of the following purchase orders indicates that you want to buy or sell immediately?

Accepted Answer

A) Limit order 
B) Market order 
C) Day order 
D) Open order 
A) Limit order 
B) Market order 
C) Day order 
D) Open order

Question 12

Interest rates are closely tied to the rate of inflation.

Accepted Answer

A) True 
 B)False

Question 13

A ________ is an order to buy or sell a set number of securities immediately at the best price available.

Accepted Answer

A) day order 
B) market order 
C) limit order 
D) prompt order 
E) none of the above 
A) day order 
B) market order 
C) limit order 
D) prompt order 
E) none of the above

Question 14

Long-term capital gains have favorable tax treatment over earned income.

Accepted Answer

A) True 
 B)False

Question 15

An efficient market is one in which all relevant information about the stock is reflected in the stock price.

Accepted Answer

A) True 
 B)False

Question 16

During the economic downturn that occurred between the fall of 2007 and spring of 2009,stocks declined in price.This period is known as a(n)

Accepted Answer

A) hare market. 
B) tortoise market. 
C) bull market. 
D) bear market. 
A) hare market. 
B) tortoise market. 
C) bull market. 
D) bear market.

Question 17

You purchase shares of BH Inc.at the beginning of the year for $30 per share.After receiving dividends of $4 per share,you sell at the end of the year for $20 per share.What is your one year rate of return?

Accepted Answer

A) 20% 
B) -20% 
C) -46.66% 
D) 70% 
A) 20% 
B) -20% 
C) -46.66% 
D) 70%

Question 18

The risk associated with the use of debt by the firm is business risk.

Accepted Answer

A) True 
 B)False

Question 19

A(n)________ order is an order to sell if the price drops below a specified level or buy if the price climbs above a specified level.

Accepted Answer

A) good-till-cancelled 
B) stop 
C) limit 
D) market 
E) open 
A) good-till-cancelled 
B) stop 
C) limit 
D) market 
E) open

Question 20

A market order is an order to buy or sell a set number of securities immediately at the best price available.

Accepted Answer

A) True 
 B)False

When you purchase an asset that generates a return,it is generally considered to be

If you are too conservative with your investments,they may not keep up with inflation.

How does the time dimension of investing relate to the concept of liquidity?

The New York Stock Exchange and the American Stock Exchange are considered regional stock exchanges.

What does an effective asset allocation strategy provide to an investor?

Should the average investor consider using short selling techniques? Why or why not?

An individual investor should look for a stock broker who will churn their accounts for them.

You purchased some stock last month for $50 per share.Today the stock closed at $80 per share.You would like to protect the profit that you have made on this stock but you really don't want to sell it in case it continues to rise in price.What should you do?

Insider trading is both unfair and illegal.It occurs when officers,directors,major stockholders,or others trade securities while

You have just purchased a large number of Italian bonds,and you reside in the United States.The variability in earnings that you might experience as the relationship between the euro and the U.S.dollar fluctuates is called

Which of the following purchase orders indicates that you want to buy or sell immediately?

Interest rates are closely tied to the rate of inflation.

A ________ is an order to buy or sell a set number of securities immediately at the best price available.

Long-term capital gains have favorable tax treatment over earned income.

An efficient market is one in which all relevant information about the stock is reflected in the stock price.

During the economic downturn that occurred between the fall of 2007 and spring of 2009,stocks declined in price.This period is known as a(n)

You purchase shares of BH Inc.at the beginning of the year for $30 per share.After receiving dividends of $4 per share,you sell at the end of the year for $20 per share.What is your one year rate of return?

The risk associated with the use of debt by the firm is business risk.

A(n)________ order is an order to sell if the price drops below a specified level or buy if the price climbs above a specified level.

A market order is an order to buy or sell a set number of securities immediately at the best price available.

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

When you purchase an asset that generates a return,it is generally considered to be

If you are too conservative with your investments,they may not keep up with inflation.

How does the time dimension of investing relate to the concept of liquidity?

The New York Stock Exchange and the American Stock Exchange are considered regional stock exchanges.

What does an effective asset allocation strategy provide to an investor?

Should the average investor consider using short selling techniques? Why or why not?

An individual investor should look for a stock broker who will churn their accounts for them.

You purchased some stock last month for $50 per share.Today the stock closed at $80 per share.You would like to protect the profit that you have made on this stock but you really don't want to sell it in case it continues to rise in price.What should you do?

Insider trading is both unfair and illegal.It occurs when officers,directors,major stockholders,or others trade securities while

You have just purchased a large number of Italian bonds,and you reside in the United States.The variability in earnings that you might experience as the relationship between the euro and the U.S.dollar fluctuates is called

Which of the following purchase orders indicates that you want to buy or sell immediately?

Interest rates are closely tied to the rate of inflation.

A ________ is an order to buy or sell a set number of securities immediately at the best price available.

Long-term capital gains have favorable tax treatment over earned income.

An efficient market is one in which all relevant information about the stock is reflected in the stock price.

During the economic downturn that occurred between the fall of 2007 and spring of 2009,stocks declined in price.This period is known as a(n)

You purchase shares of BH Inc.at the beginning of the year for $30 per share.After receiving dividends of $4 per share,you sell at the end of the year for $20 per share.What is your one year rate of return?

The risk associated with the use of debt by the firm is business risk.

A(n)________ order is an order to sell if the price drops below a specified level or buy if the price climbs above a specified level.

A market order is an order to buy or sell a set number of securities immediately at the best price available.

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