Question 1

Tavia Jones purchased mutual funds because she knows this investment provides professional management and guaranteed returns.

Accepted Answer

A) True 
 B)False  False

Question 2

All stock information on the Internet is provided free of charge by professional advisory services.

Accepted Answer

A) True 
 B)False  False

Question 3

A prospectus is a corporation's annual report on its operations.

Accepted Answer

A) True 
 B)False  False

Question 4

For most investors, the amount of time your investments have to work for you is of no concern.

Accepted Answer

A) True 
 B)False

Question 5

Investors often choose investments like precious metals and antique collectibles because they offer substantial income possibilities.

Accepted Answer

A) True 
 B)False

Question 6

NYSE stands for New York Stock Exchange.

Accepted Answer

A) True 
 B)False

Question 7

If a bond were listed at 84, its price would be $84.00.

Accepted Answer

A) True 
 B)False

Question 8

Load funds generally charge higher fees to purchase shares than do no-load funds.

Accepted Answer

A) True 
 B)False

Question 9

If the value of a stock you bought on margin decreases to approximately 60 percent of its original price, you will receive a margin call from the brokerage firm.

Accepted Answer

A) True 
 B)False

Question 10

Mary Lou asks for your help. She must prepare a personal balance sheet for a class assignment. You tell her that a personal balance sheet simply lists her income and expenses for a specified period of time.

Accepted Answer

A) True 
 B)False

Question 11

Kevin Lon sold stock he owned at a price below what he paid for it. This is an example of selling short.

Accepted Answer

A) True 
 B)False

Question 12

When evaluating an investment, the potential return should be directly related to the assumed risk.

Accepted Answer

A) True 
 B)False

Question 13

A true financial planner has had at least two years of training in investments, insurance, taxation, retirement planning, and estate planning.

Accepted Answer

A) True 
 B)False

Question 14

Real estate is a great investment as property values always increase.

Accepted Answer

A) True 
 B)False

Question 15

Investors pay a contingent deferred sales fee every time they purchase shares in a mutual fund.

Accepted Answer

A) True 
 B)False

Question 16

A closed-end fund sells shares in the fund to investors only when the fund is originally organized.

Accepted Answer

A) True 
 B)False

Question 17

The Wall Street Journal and Barron's devote their reporting almost exclusively to financial and economic news.

Accepted Answer

A) True 
 B)False

Question 18

Treasury bills are sold in $100 units and have a maturity of thirty years.

Accepted Answer

A) True 
 B)False

Question 19

U.S. savings bonds are purchased for one-half of their maturity value.

Accepted Answer

A) True 
 B)False

Question 20

Bank accounts that pay interest are considered a form of conservative investment.

Accepted Answer

A) True 
 B)False

Exam 20: B: Understanding Personal Finances and Investments

Tavia Jones purchased mutual funds because she knows this investment provides professional management and guaranteed returns.

All stock information on the Internet is provided free of charge by professional advisory services.

A prospectus is a corporation's annual report on its operations.

For most investors, the amount of time your investments have to work for you is of no concern.

Investors often choose investments like precious metals and antique collectibles because they offer substantial income possibilities.

NYSE stands for New York Stock Exchange.

If a bond were listed at 84, its price would be $84.00.

Load funds generally charge higher fees to purchase shares than do no-load funds.

If the value of a stock you bought on margin decreases to approximately 60 percent of its original price, you will receive a margin call from the brokerage firm.

Mary Lou asks for your help. She must prepare a personal balance sheet for a class assignment. You tell her that a personal balance sheet simply lists her income and expenses for a specified period of time.

Kevin Lon sold stock he owned at a price below what he paid for it. This is an example of selling short.

When evaluating an investment, the potential return should be directly related to the assumed risk.

A true financial planner has had at least two years of training in investments, insurance, taxation, retirement planning, and estate planning.

Real estate is a great investment as property values always increase.

Investors pay a contingent deferred sales fee every time they purchase shares in a mutual fund.

A closed-end fund sells shares in the fund to investors only when the fund is originally organized.

The Wall Street Journal and Barron's devote their reporting almost exclusively to financial and economic news.

Treasury bills are sold in $100 units and have a maturity of thirty years.

U.S. savings bonds are purchased for one-half of their maturity value.

Bank accounts that pay interest are considered a form of conservative investment.