Question 1

For people in the highest marginal tax bracket,a $1000 capital gain would be taxed less than $1000 dividend income.

Accepted Answer

A) True 
 B)False

Question 2

If you invest $1000 in stock that pays no dividends and sell the stock exactly one year later for $1100,what will be your return? (Ignore commissions and trading fees.)

Accepted Answer

A) 1 percent 
B) 5 percent 
C) 10 percent 
D) 100 percent 
A) 1 percent 
B) 5 percent 
C) 10 percent 
D) 100 percent

Question 3

Real estate returns can be in the form of

Accepted Answer

A) capital gains,losses,interest and rental income. 
B) interest and dividends. 
C) capital gains,losses and dividends. 
D) capital gains,losses and rental income. 
A) capital gains,losses,interest and rental income. 
B) interest and dividends. 
C) capital gains,losses and dividends. 
D) capital gains,losses and rental income.

Question 4

Asset allocation improves diversification,but has no effect on the risk premium of your portfolio.

Accepted Answer

A) True 
 B)False

Question 5

A stock with larger standard deviations of returns has higher risk than a stock with lower standard deviations.

Accepted Answer

A) True 
 B)False

Question 6

One advantage of investing in your home compared to stocks,bonds,and mutual funds is

Accepted Answer

A) real estate is more likely to go up in value. 
B) only fifty percent of the capital gains are taxed. 
C) the capital gains are usually tax exempt. 
D) real estate is less risky. 
A) real estate is more likely to go up in value. 
B) only fifty percent of the capital gains are taxed. 
C) the capital gains are usually tax exempt. 
D) real estate is less risky.

Question 7

Taking a loan for $5000 to invest in a conservative portfolio is always more risky than saving $5000 to invest in the conservative portfolio.

Accepted Answer

A) True 
 B)False

Question 8

Savvy investors can find investments that generate high rates of return with low levels of risk.

Accepted Answer

A) True 
 B)False

Question 9

You can reduce your investment risk most effectively through

Accepted Answer

A) asset allocation. 
B) limiting the time horizon. 
C) diversifying stocks. 
D) maximizing the beta. 
A) asset allocation. 
B) limiting the time horizon. 
C) diversifying stocks. 
D) maximizing the beta.

Question 10

Growth stocks are likely to pay high dividends.

Accepted Answer

A) True 
 B)False

Question 11

Given the bank rate of 3.5 percent,and a corporate bond that will pay 10 percent.What is the risk premium?

Accepted Answer

A) 13.5 percent 
B) 6)5 percent 
C) 7)5 percent 
D) 0 percent 
A) 13.5 percent 
B) 6)5 percent 
C) 7)5 percent 
D) 0 percent

Question 12

You want to save $10 000 toward the down payment on a house in five years.If you can earn 8 percent (compounded monthly),approximately how much should you save each month to reach this short-term goal?

Accepted Answer

A) $142 
B) $136 
C) $167 
D) $131 
A) $142 
B) $136 
C) $167 
D) $131

Question 13

Real estate is a good investment option for individuals and it offers the same liquidity as stocks or bonds.

Accepted Answer

A) True 
 B)False

Question 14

A stock was purchased at $23,sold exactly two years later at $25.50,and paid a $0.70 dividend per year.What was the annual return on investment?

Accepted Answer

A) 7 percent 
B) 8)5 percent 
C) 17 percent 
D) 10.9 percent 
A) 7 percent 
B) 8)5 percent 
C) 17 percent 
D) 10.9 percent

Question 15

More than half of all trading in the financial markets is attributable to individual investors.

Accepted Answer

A) True 
 B)False

Question 16

Which of the following is a good example of systematic risk?

Accepted Answer

A) The low interest rates in effect since the 2008 - 2009 credit crisis 
B) The decline in Nortel stock price after the crash of 2000 - 2001 
C) The decline in Blackberry stock price since the 2008 - 2009 credit crisis 
D) The decline in the stock price of Canadian banks in the 2008 - 2009 credit crisis 
A) The low interest rates in effect since the 2008 - 2009 credit crisis 
B) The decline in Nortel stock price after the crash of 2000 - 2001 
C) The decline in Blackberry stock price since the 2008 - 2009 credit crisis 
D) The decline in the stock price of Canadian banks in the 2008 - 2009 credit crisis

Question 17

Preferred shares always pay their dividends.

Accepted Answer

A) True 
 B)False

Question 18

Which of the following is true about growth stocks?

Accepted Answer

A) They are more established companies. 
B) They mainly produce a return to investors via capital gains. 
C) They pay high dividends. 
D) They are the opposite of value stocks. 
A) They are more established companies. 
B) They mainly produce a return to investors via capital gains. 
C) They pay high dividends. 
D) They are the opposite of value stocks.

Question 19

Which is true about dividends?

Accepted Answer

A) They are earnings distributed to shareholders. 
B) They usually provide the same return as bonds. 
C) They are retained earnings. 
D) They change each quarter. 
A) They are earnings distributed to shareholders. 
B) They usually provide the same return as bonds. 
C) They are retained earnings. 
D) They change each quarter.

Question 20

Ellie bought a stock for $18 and sold it for $26.She has a taxable capital gain of $4.

Accepted Answer

A) True 
 B)False

For people in the highest marginal tax bracket,a $1000 capital gain would be taxed less than $1000 dividend income.

If you invest $1000 in stock that pays no dividends and sell the stock exactly one year later for $1100,what will be your return? (Ignore commissions and trading fees.)

Real estate returns can be in the form of

Asset allocation improves diversification,but has no effect on the risk premium of your portfolio.

A stock with larger standard deviations of returns has higher risk than a stock with lower standard deviations.

One advantage of investing in your home compared to stocks,bonds,and mutual funds is

Taking a loan for $5000 to invest in a conservative portfolio is always more risky than saving $5000 to invest in the conservative portfolio.

Savvy investors can find investments that generate high rates of return with low levels of risk.

You can reduce your investment risk most effectively through

Growth stocks are likely to pay high dividends.

Given the bank rate of 3.5 percent,and a corporate bond that will pay 10 percent.What is the risk premium?

You want to save $10 000 toward the down payment on a house in five years.If you can earn 8 percent (compounded monthly),approximately how much should you save each month to reach this short-term goal?

Real estate is a good investment option for individuals and it offers the same liquidity as stocks or bonds.

A stock was purchased at $23,sold exactly two years later at $25.50,and paid a $0.70 dividend per year.What was the annual return on investment?

More than half of all trading in the financial markets is attributable to individual investors.

Which of the following is a good example of systematic risk?

Preferred shares always pay their dividends.

Which of the following is true about growth stocks?

Which is true about dividends?

Ellie bought a stock for $18 and sold it for $26.She has a taxable capital gain of $4.

Tools for Financial Planning - Applying Time Value Concepts

Tools for Financial Planning - Planning with Personal Financial Statements

Tools for Financial Planning - Using Tax Concepts for Planning

Managing Your Financial Resources - Banking Services and Managing Your Money

Managing Your Financial Resources - Assessing,Managing and Securing Your Credit

Managing Your Financial Resources - Purchasing and Financing a Home

Protecting Your Wealth - Auto and Homeowner's Insurance

Protecting Your Wealth - Health and Life Insurance

Personal Investing - Investing in Stocks

Personal Investing - Investing in Bonds

Personal Investing - Investing in Mutual Funds

Retirement and Estate Planning - Retirement Planning

Retirement and Estate Planning - Estate Planning

Synthesis of Financial Planning - Integrating the Components of a Financial Plan

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Exam 4: Personal Investing - Investing Fundamentals

For people in the highest marginal tax bracket,a $1000 capital gain would be taxed less than $1000 dividend income.

If you invest $1000 in stock that pays no dividends and sell the stock exactly one year later for $1100,what will be your return? (Ignore commissions and trading fees.)

Real estate returns can be in the form of

Asset allocation improves diversification,but has no effect on the risk premium of your portfolio.

A stock with larger standard deviations of returns has higher risk than a stock with lower standard deviations.

One advantage of investing in your home compared to stocks,bonds,and mutual funds is

Taking a loan for $5000 to invest in a conservative portfolio is always more risky than saving $5000 to invest in the conservative portfolio.

Savvy investors can find investments that generate high rates of return with low levels of risk.

You can reduce your investment risk most effectively through

Growth stocks are likely to pay high dividends.

Given the bank rate of 3.5 percent,and a corporate bond that will pay 10 percent.What is the risk premium?

You want to save $10 000 toward the down payment on a house in five years.If you can earn 8 percent (compounded monthly),approximately how much should you save each month to reach this short-term goal?

Real estate is a good investment option for individuals and it offers the same liquidity as stocks or bonds.

A stock was purchased at $23,sold exactly two years later at $25.50,and paid a $0.70 dividend per year.What was the annual return on investment?

More than half of all trading in the financial markets is attributable to individual investors.

Which of the following is a good example of systematic risk?

Preferred shares always pay their dividends.

Which of the following is true about growth stocks?

Which is true about dividends?

Ellie bought a stock for $18 and sold it for $26.She has a taxable capital gain of $4.

Tools for Financial Planning - Applying Time Value Concepts

Tools for Financial Planning - Planning with Personal Financial Statements

Tools for Financial Planning - Using Tax Concepts for Planning

Managing Your Financial Resources - Banking Services and Managing Your Money

Managing Your Financial Resources - Assessing,Managing and Securing Your Credit

Managing Your Financial Resources - Purchasing and Financing a Home

Protecting Your Wealth - Auto and Homeowner's Insurance

Protecting Your Wealth - Health and Life Insurance

Personal Investing - Investing in Stocks

Personal Investing - Investing in Bonds

Personal Investing - Investing in Mutual Funds

Retirement and Estate Planning - Retirement Planning

Retirement and Estate Planning - Estate Planning

Synthesis of Financial Planning - Integrating the Components of a Financial Plan

Filters