Question 1

Which one of the following statements is true?

Accepted Answer

A)  Global investments must be evaluated just like domestic investments.
B)  Global investments can only be bought in the U.S.
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 foreign firms, rather than in global mutual funds.
E)  Investing in global investments does not diversify your portfolio.

Question 2

Which one of the following investments would provide the most predictable source of income?

Accepted Answer

A)  Commodities
B)  Options
C)  Precious metals
D)  Common stock
E)  Government securities

Question 3

A speculative investment is a high-risk investment that is made in the hope of earning a relatively large profit over a long period of time.

Accepted Answer

A) True 
 B)False

Question 4

The ability of an investment to be converted to cash without a substantial loss in dollar value is called:

Accepted Answer

A)  asset value.
B)  liquidity.
C)  growth potential.
D)  fixed cost factor.
E)  variable cost factor.

Question 5

Which one of the following investments offers the least amount of growth potential?

Accepted Answer

A)  Real estate
B)  Common stock
C)  Mutual funds
D)  Options
E)  Preferred stock

Question 6

Which one of the following statements is true?

Accepted Answer

A)  Investors should put all of their "eggs in one basket."
B)  Individuals can ignore their tolerance for risk when selecting specific investments.
C)  Diversification is one way to increase your risk.
D)  The amount of time a specific investment has to work is an important factor when managing an investment.
E)  Younger investors tend to invest a large percentage of their portfolio in income-producing securities.

Question 7

The rate of return on an investment has no effect on a long-term investment program.

Accepted Answer

A) True 
 B)False

Question 8

James Gripka has a mutual fund that automatically takes $50 out of his paycheck each month.Which suggestion for obtaining the money he needs for investing is he following?

Accepted Answer

A)  Taking advantage of gifts, inheritance and other windfalls
B)  Taking advantage of employer-sponsored retirement programs
C)  Participating in an elective savings program
D)  Making a special effort once or twice a year to save
E)  Using financial leverage to increase investment returns

Question 9

When a bondholder loses money because interest rates in the economy increase,it is an example of ____________ risk.

Accepted Answer

A)  market
B)  interest rate
C)  inflation
D)  business failure
E)  current

Question 10

A ceiling on a credit card is determined by the borrower and is the dollar amount that they want to borrow using the cash advance provision on their credit card.

Accepted Answer

A) True 
 B)False

Question 11

The fees for investor services and newsletters generally range from ____________ per year.

Accepted Answer

A)  $10 to $20
B)  $20 to $30
C)  $30 to $1,000
D)  $300 to $1,000
E)  over $1,000

Question 12

All except which one of the following are good ways to acquire money for starting an investment program?

Accepted Answer

A)  Pay bills first, and then save a reasonable amount of money for investment
B)  Participate in an elective savings program
C)  Make a special savings effort one month per year
D)  Borrow money specifically for investment purposes
E)  Take advantage of an employer-sponsored retirement program

Question 13

Sam Waters just received $10,000 from his grandmother's estate.He has thought about buying himself a new Harley with the money but has decided instead to add the money to his mutual fund account.What is he doing to obtain the money for investing?

Accepted Answer

A)  Paying himself first
B)  Taking advantage of employer-sponsored retirement programs
C)  Participating in an elective savings program
D)  Making a special effort once or twice a year to save
E)  Sacrificing some purchases to provide financing for investments

Question 14

Which one of the following is not a recommended step individuals can use to weather a future financial crisis?

Accepted Answer

A)  Establish a smaller than usual emergency fund
B)  Consider converting investments to cash to preserve value
C)  Notify lenders and credit card companies if you are unable to make payments
D)  Reduce spending
E)  Monitor the value of your investment and retirement accounts

Question 15

If interest rates in the overall economy increase to 8 percent,which one of the following is most likely to be the approximate market value of a $1,000 corporate bond with a fixed interest rate of 7 percent? Round to the nearest hundred.

Accepted Answer

A)  $0
B)  $1,100
C)  $900
D)  $1,000
E)  $1,300

Question 16

If a $1,000 bond pays 5% interest each year,how much would each semiannual interest payment be?

Accepted Answer

A)  $5
B)  $10
C)  $20
D)  $25
E)  $50

Question 17

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

Accepted Answer

A)  stockbrokers.
B)  securities exchanges.
C)  stock regulations.
D)  investor services.
E)  stock underwriters.

Question 18

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 19

Brenda Lee has received a $10,000 gift from her mother and is trying to decide how to invest it.She thinks she would like to invest it in stocks,because she knows that stocks have been appreciating by about 10% over the last several years.What aspect of investing interests Brenda?

Accepted Answer

A)  Risk
B)  Return
C)  Diversification
D)  Liquidity
E)  Income

Question 20

John Hernandez is 24 years old and has saved enough money to fund an adequate emergency fund.In addition,he has saved $5,600 that can be used to fund an investment program.He is single,has no dependents,and would like to retire when he is 60 years old.Which one of the investment factors listed below would be most important for an investor like Mr.Hernandez?

Accepted Answer

A)  Beta
B)  Income
C)  Growth
D)  Risk
E)  Liquidity

Exam 13: Investing Fundamentals

Which one of the following investments offers the least amount of growth potential?

Correct Answer
verified

Which one of the following investments would provide the most predictable source of income?

Correct Answer
verified

Sam Waters just received $10,000 from his grandmother's estate.He has thought about buying himself a new Harley with the money but has decided instead to add the money to his mutual fund account.What is he doing to obtain the money for investing?

Correct Answer
verified

Which one of the following is not a recommended step individuals can use to weather a future financial crisis?

Correct Answer
verified

A speculative investment is a high-risk investment that is made in the hope of earning a relatively large profit over a long period of time.

Correct Answer
verified

The fees for investor services and newsletters generally range from ____________ per year.

Correct Answer
verified

The ability of an investment to be converted to cash without a substantial loss in dollar value is called:

Correct Answer
verified

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

Correct Answer
verified

If a $1,000 bond pays 5% interest each year,how much would each semiannual interest payment be?

Correct Answer
verified

Correct Answer
verified

A ceiling on a credit card is determined by the borrower and is the dollar amount that they want to borrow using the cash advance provision on their credit card.

Correct Answer
verified

James Gripka has a mutual fund that automatically takes $50 out of his paycheck each month.Which suggestion for obtaining the money he needs for investing is he following?

Correct Answer
verified

When a bondholder loses money because interest rates in the economy increase,it is an example of ____________ risk.

Correct Answer
verified

All except which one of the following are good ways to acquire money for starting an investment program?

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

Which one of the following statements is true?

Correct Answer
verified

Brenda Lee has received a $10,000 gift from her mother and is trying to decide how to invest it.She thinks she would like to invest it in stocks,because she knows that stocks have been appreciating by about 10% over the last several years.What aspect of investing interests Brenda?

Correct Answer
verified

The rate of return on an investment has no effect on a long-term investment program.

Correct Answer
verified

If interest rates in the overall economy increase to 8 percent,which one of the following is most likely to be the approximate market value of a $1,000 corporate bond with a fixed interest rate of 7 percent? Round to the nearest hundred.

Correct Answer
verified

Which one of the following statements is true?

Correct Answer
verified

Exam 13: Investing Fundamentals

Which one of the following investments offers the least amount of growth potential?

Correct AnswerverifiedShow Answer

Which one of the following investments would provide the most predictable source of income?

Correct AnswerverifiedShow Answer

Sam Waters just received $10,000 from his grandmother's estate.He has thought about buying himself a new Harley with the money but has decided instead to add the money to his mutual fund account.What is he doing to obtain the money for investing?

Correct AnswerverifiedShow Answer

Which one of the following is not a recommended step individuals can use to weather a future financial crisis?

Correct AnswerverifiedShow Answer

A speculative investment is a high-risk investment that is made in the hope of earning a relatively large profit over a long period of time.

Correct AnswerverifiedShow Answer

The fees for investor services and newsletters generally range from ____________ per year.

Correct AnswerverifiedShow Answer

The ability of an investment to be converted to cash without a substantial loss in dollar value is called:

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

If a $1,000 bond pays 5% interest each year,how much would each semiannual interest payment be?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

A ceiling on a credit card is determined by the borrower and is the dollar amount that they want to borrow using the cash advance provision on their credit card.

Correct AnswerverifiedShow Answer

James Gripka has a mutual fund that automatically takes $50 out of his paycheck each month.Which suggestion for obtaining the money he needs for investing is he following?

Correct AnswerverifiedShow Answer

When a bondholder loses money because interest rates in the economy increase,it is an example of ____________ risk.

Correct AnswerverifiedShow Answer

All except which one of the following are good ways to acquire money for starting an investment program?

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

Which one of the following statements is true?

Correct AnswerverifiedShow Answer

Brenda Lee has received a $10,000 gift from her mother and is trying to decide how to invest it.She thinks she would like to invest it in stocks,because she knows that stocks have been appreciating by about 10% over the last several years.What aspect of investing interests Brenda?

Correct AnswerverifiedShow Answer

The rate of return on an investment has no effect on a long-term investment program.

Correct AnswerverifiedShow Answer

If interest rates in the overall economy increase to 8 percent,which one of the following is most likely to be the approximate market value of a $1,000 corporate bond with a fixed interest rate of 7 percent? Round to the nearest hundred.

Correct AnswerverifiedShow Answer

Which one of the following statements is true?

Correct AnswerverifiedShow Answer

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