Question 1

Which one of the following is a true statement?

Accepted Answer

A)  Professional management is an especially important factor for investors purchasing a mutual fund.
B)  The only reason investors purchase mutual funds is interest rate risk.
C)  With mutual funds may experience loss,your original investment is guaranteed.
D)  Mutual funds are all designed to appeal to conservative investors with no investment goals.
E)  Professional market timers will always choose the right mutual fund for a particular individual.F) A) and C)
G) A) and B)

Question 2

Which one of the following is not a warning sign that you might be getting into credit card trouble?

Accepted Answer

A)  paying off your credit card balance off each month
B)  using your credit card to pay for small purchases
C)  taking advantage of the cash advance feature
D)  using a large number of credit cards
E)  using the cash advance feature of one credit card to occasionally pay the monthly payment on another credit cardF) B) and D)
G) A) and E)

Question 3

Gina Davidson has received $50,000 in a divorce settlement and is trying to decide how to invest it.She has looked at stocks but knows that some stocks have lost a lot of value for their owners recently.What aspect of investing is she most concerned about?

Accepted Answer

A)  risk
B)  return
C)  diversification
D)  liquidity
E)  investment growthF) All of the above
G) A) and E) A

Question 4

Which of the following statements is true?

Accepted Answer

A)  When establishing an investment program,you should begin by monitoring your investments.
B)  When you are choosing an investment,you should examine only the interest rate risk factor associated with each investment.
C)  When establishing an investment program,you should examine the potential return offered by different investment alternatives.
D)  Leave the financial planning to the professionals.
E)  There is no need to monitor your investments after you have made your investment decision.F) A) and D)
G) A) and C)

Question 5

Which one of the following is not a business periodical?

Accepted Answer

A)  Barrons
B)  Business Week
C)  New York Stock Exchange Report
D)  Forbes
E)  FortuneF) A) and D)
G) All of the above

Question 6

Over the past 50 years,stocks and U.S.government bonds have returned about the same rate of return.

Accepted Answer

A) True 
 B)False

Question 7

Which one of the following statements is true?

Accepted Answer

A)  Global investments must be evaluated just like other investment alternatives.
B)  Since global investments can only be bought in the U.S. ,there is no need to worry about currency exchange rates.
C)  Today,very few investors are investing in stocks and bonds issued by foreign firms or in global mutual funds.
D)  For most small investors,it makes more sense to invest in stocks and bonds issued by individual foreign firms,rather than in global mutual funds.
E)  Evaluating global investments is easy because there is plenty of good information availablE.F) C) and D)
G) None of the above

Question 8

After the death of her husband,Gina Baker,35,received a check for $350,000 from a life insurance company.Gina has two small children and wants to make sure that both she and the children are taken care of in the future.Based on this information,which of the investment factors listed below would be the most important to Gina in her investment program?

Accepted Answer

A)  beta
B)  safety
C)  business failure
D)  market risk
E)  liquidityF) A) and E)
G) B) and E)

Question 9

Which one of the following individuals should have a higher tolerance for risk?

Accepted Answer

A)  Joan Cummings who is a single mother with two small children
B)  Darren Carter who works for American Airlines and is worried that he is going to be laid off soon
C)  Barry Parks who is an investment banker and earns over $200,000 per year
D)  Michael Clark who is 74 years old and has been retired for 6 years
E)  Fred Funderbunk who is a pizza delivery person and makes about $15,000 per yearF) A) and B)
G) All of the above

Question 10

For an investor who wants to speculate,which of the following investments would be appropriate?

Accepted Answer

A)  blue-chip stocks
B)  options
C)  utility stocks
D)  corporate bonds
E)  preferred stocksF) A) and C)
G) A) and E)

Question 11

Which of the following is a true statement?

Accepted Answer

A)  The first order of business for an investor is acquiring the money needed to begin investing.
B)  To be useful,investment objectives must be very general.
C)  Investment goals are the same for each individual.
D)  Because investment objectives deal with the future,it is useless to plan more than five years in the future.
E)  A long-term investment objective involves a time period of five years or less.F) A) and C)
G) A) and D)

Question 12

The money obtained by a company from selling corporate bonds:

Accepted Answer

A)  is obtained from lenders.
B)  is obtained from the owners of the business.
C)  is obtained from employee stock option programs.
D)  does not have to be repaiD.
E)  must be allocated to retirement programs.F) B) and C)
G) B) and D)

Question 13

Although useful for many things,the Internet cannot be used to monitor the value of stock,bond,and mutual fund investments.

Accepted Answer

A) True 
 B)False

Question 14

Once you have painstakingly developed a financial plan,it is unwise to change it.

Accepted Answer

A) True 
 B)False

Question 15

Terry Hamilton has just received $30,000 from an uncle who died and is trying to decide how to invest it.She has done some research has decided that about 30% of the money should go into large cap stocks,20% into medium cap stocks,15% into small cap stocks,10% into bonds,10% into foreign stock,and 15% into cash.She thinks that even if one area does not do that well,the rest will so that her overall return will be pretty good.What aspect of investing is Terry most concerned about?

Accepted Answer

A)  income
B)  return
C)  diversification
D)  liquidity
E)  investment growthF) A) and B)
G) A) and C) C

Question 16

Standard & Poor's and Value Line are companies that would be examples of:

Accepted Answer

A)  stockbrokers.
B)  securities exchanges.
C)  stock regulations.
D)  investors' services.
E)  stock underwriters.F) B) and D)
G) D) and E)

Question 17

Which one of these is not an example of systematic risk?

Accepted Answer

A)  recession
B)  inflation
C)  political upheaval such as war
D)  decline in the auto industry
E)  decline in national economyF) A) and E)
G) B) and E)

Question 18

An intermediate-term investment objective is defined as one that will be accomplished within a period of:

Accepted Answer

A)  five to ten years.
B)  two to five years.
C)  more than five years.
D)  one to five years.
E)  less than one year.F) B) and D)
G) B) and C)

Question 19

Audrey is thinking about an investment that involves buying a written pledge by a corporation to repay a specified amount of money.It also pays interest every 6 months until it matures.What investment is Audrey thinking about purchasing?

Accepted Answer

A)  common stock
B)  preferred stock
C)  corporate bond
D)  real estate
E)  mutual fundF) B) and D)
G) B) and E)

Question 20

Jack Masters earns $40,000 a year.His monthly expenses total $2,100.What is the minimum amount of money that Mr.Masters should set aside in an emergency fund?

Accepted Answer

A)  $2,100
B)  $4,200
C)  $6,300
D)  $8,400
E)  $10,000F) A) and C)
G) A) and E) C

Exam 13: Investing Fundamentals

Which one of the following is a true statement?

Correct Answer
verified

Which one of the following is not a warning sign that you might be getting into credit card trouble?

Correct Answer
verified

Gina Davidson has received $50,000 in a divorce settlement and is trying to decide how to invest it.She has looked at stocks but knows that some stocks have lost a lot of value for their owners recently.What aspect of investing is she most concerned about?

Correct Answer
verified
A

Which of the following statements is true?

Correct Answer
verified

Which one of the following is not a business periodical?

Correct Answer
verified

Over the past 50 years,stocks and U.S.government bonds have returned about the same rate of return.

Correct Answer
verified

Which one of the following statements is true?

Correct Answer
verified

Correct Answer
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Which one of the following individuals should have a higher tolerance for risk?

Correct Answer
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For an investor who wants to speculate,which of the following investments would be appropriate?

Correct Answer
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Which of the following is a true statement?

Correct Answer
verified

The money obtained by a company from selling corporate bonds:

Correct Answer
verified

Although useful for many things,the Internet cannot be used to monitor the value of stock,bond,and mutual fund investments.

Correct Answer
verified

Once you have painstakingly developed a financial plan,it is unwise to change it.

Correct Answer
verified

Correct Answer
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C

Standard & Poor's and Value Line are companies that would be examples of:

Correct Answer
verified

Which one of these is not an example of systematic risk?

Correct Answer
verified

An intermediate-term investment objective is defined as one that will be accomplished within a period of:

Correct Answer
verified

Audrey is thinking about an investment that involves buying a written pledge by a corporation to repay a specified amount of money.It also pays interest every 6 months until it matures.What investment is Audrey thinking about purchasing?

Correct Answer
verified

Jack Masters earns $40,000 a year.His monthly expenses total $2,100.What is the minimum amount of money that Mr.Masters should set aside in an emergency fund?

Correct Answer
verified
C

Exam 13: Investing Fundamentals

Which one of the following is a true statement?

Correct AnswerverifiedShow Answer

Which one of the following is not a warning sign that you might be getting into credit card trouble?

Correct AnswerverifiedShow Answer

Gina Davidson has received $50,000 in a divorce settlement and is trying to decide how to invest it.She has looked at stocks but knows that some stocks have lost a lot of value for their owners recently.What aspect of investing is she most concerned about?

Correct AnswerverifiedA

Which of the following statements is true?

Correct AnswerverifiedShow Answer

Which one of the following is not a business periodical?

Correct AnswerverifiedShow Answer

Over the past 50 years,stocks and U.S.government bonds have returned about the same rate of return.

Correct AnswerverifiedShow Answer

Which one of the following statements is true?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Which one of the following individuals should have a higher tolerance for risk?

Correct AnswerverifiedShow Answer

For an investor who wants to speculate,which of the following investments would be appropriate?

Correct AnswerverifiedShow Answer

Which of the following is a true statement?

Correct AnswerverifiedShow Answer

The money obtained by a company from selling corporate bonds:

Correct AnswerverifiedShow Answer

Although useful for many things,the Internet cannot be used to monitor the value of stock,bond,and mutual fund investments.

Correct AnswerverifiedShow Answer

Once you have painstakingly developed a financial plan,it is unwise to change it.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedC

Standard & Poor's and Value Line are companies that would be examples of:

Correct AnswerverifiedShow Answer

Which one of these is not an example of systematic risk?

Correct AnswerverifiedShow Answer

An intermediate-term investment objective is defined as one that will be accomplished within a period of:

Correct AnswerverifiedShow Answer

Audrey is thinking about an investment that involves buying a written pledge by a corporation to repay a specified amount of money.It also pays interest every 6 months until it matures.What investment is Audrey thinking about purchasing?

Correct AnswerverifiedShow Answer

Jack Masters earns $40,000 a year.His monthly expenses total $2,100.What is the minimum amount of money that Mr.Masters should set aside in an emergency fund?

Correct AnswerverifiedC

Correct Answer
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A

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C

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C