Question 1

Which of the following is not an investment in thelayperson's general use of the term

Accepted Answer

A)  equipment 
B)  land 
C)  stock 
D)  savings account 
A)  equipment 
B)  land 
C)  stock 
D)  savings account A

Question 2

Diversification reduces

Accepted Answer

A)  income 
B)  capital gains 
C)  taxes 
D)  risk 
A)  income 
B)  capital gains 
C)  taxes 
D)  risk D

Question 3

The investor should specify the objectives of investing.

Accepted Answer

A) True 
 B)False  True

Question 4

CFA is a professional designation for individuals seeking positions as portfolio managers.

Accepted Answer

A) True 
 B)False

Question 5

Many investments such as stock have commoncharacteristics including1. existence of secondary markets2. risk3. potential for capital gains

Accepted Answer

A)  1 and 2 
B)  1 and 3 
C)  2 and 3 
D)  all of the above 
A)  1 and 2 
B)  1 and 3 
C)  2 and 3 
D)  all of the above

Question 6

Reasons for saving and investing include1. need for funds to meet emergencies2. retirement income3. desire to leave an estate for children

Accepted Answer

A)  1 and 2 
B)  1 and 3 
C)  2 and 3 
D)  all of the above 
A)  1 and 2 
B)  1 and 3 
C)  2 and 3 
D)  all of the above

Question 7

Trading implies

Accepted Answer

A)  frequently buying securities 
B)  frequently selling securities 
C)  frequently buying and selling securities 
D)  investing 
A)  frequently buying securities 
B)  frequently selling securities 
C)  frequently buying and selling securities 
D)  investing

Question 8

Which of the following is an investment as definedby an economist

Accepted Answer

A)  equipment 
B)  land 
C)  stock 
D)  savings account 
A)  equipment 
B)  land 
C)  stock 
D)  savings account

Question 9

Financial investments are made in efficient markets.The existence of these markets suggests that

Accepted Answer

A)  investors cannot earn superior returns 
B)  investors cannot expect to outperform the market consistently 
C)  securies prices are random 
D)  bearing additional risk will not increase return 
A)  investors cannot earn superior returns 
B)  investors cannot expect to outperform the market consistently 
C)  securies prices are random 
D)  bearing additional risk will not increase return

Question 10

The anticipated return and the realized return often differ.

Accepted Answer

A) True 
 B)False

Question 11

Risk

Accepted Answer

A)  depends solely on price fluctuations 
B)  should be maximized to increase returns 
C)  is reduced through specialization 
D)  refers to the uncertainty of returns 
A)  depends solely on price fluctuations 
B)  should be maximized to increase returns 
C)  is reduced through specialization 
D)  refers to the uncertainty of returns

Question 12

Investments are made in anticipation of a return.

Accepted Answer

A) True 
 B)False

Question 13

Stocks are initially sold in the "primary" market and subsequently traded in the "secondary" market.

Accepted Answer

A) True 
 B)False

Question 14

Liquidity refers to the ease of selling a stock for a capital gain.

Accepted Answer

A) True 
 B)False

Question 15

Portfolio assessment should include measures of both risk and return.

Accepted Answer

A) True 
 B)False

Question 16

The terms "investing" and "trading" refer to purchasing and selling securities.

Accepted Answer

A) True 
 B)False

Question 17

Capital gains are the sole source of the return on an investment.

Accepted Answer

A) True 
 B)False

Question 18

An informed investor can expect to consistently outperform the market.

Accepted Answer

A) True 
 B)False

Question 19

Efficient markets suggests that investors will outperform the market consistently.

Accepted Answer

A) True 
 B)False

Question 20

Risk is the uncertainty that the realized return may differ from the expected.

Accepted Answer

A) True 
 B)False

Which of the following is not an investment in thelayperson's general use of the term

Diversification reduces

The investor should specify the objectives of investing.

CFA is a professional designation for individuals seeking positions as portfolio managers.

Many investments such as stock have commoncharacteristics including1. existence of secondary markets2. risk3. potential for capital gains

Reasons for saving and investing include1. need for funds to meet emergencies2. retirement income3. desire to leave an estate for children

Trading implies

Which of the following is an investment as definedby an economist

Financial investments are made in efficient markets.The existence of these markets suggests that

The anticipated return and the realized return often differ.

Risk

Investments are made in anticipation of a return.

Stocks are initially sold in the "primary" market and subsequently traded in the "secondary" market.

Liquidity refers to the ease of selling a stock for a capital gain.

Portfolio assessment should include measures of both risk and return.

The terms "investing" and "trading" refer to purchasing and selling securities.

Capital gains are the sole source of the return on an investment.

An informed investor can expect to consistently outperform the market.

Efficient markets suggests that investors will outperform the market consistently.

Risk is the uncertainty that the realized return may differ from the expected.

Securities Markets

The Time Value of Money Private

Financial Planning, Taxation, and the Efficiency of Financial Markets

Risk and Portfolio Management

Investment Companies: Mutual Funds Private

Closed-End Investment Companies, Real Estate Investment Trusts Reits, and Exchange-Traded Funds Etfs Private

Stock Private

The Valuation of Stock Private

Investment Returns and Aggregate Measures of Stock Markets

The Macroeconomic Environment for Investment

Behavioral Finance and Technical Analysis

The Bond Market Private

The Valuation of Fixed Income Securities

Government Securities

Convertible Bonds and Convertible Preferred Stock

An Introduction to Options

Option Valuation and Strategies Private

Commodity and Financial Futures Private

Financial Planning and Investing in an Efficient Market Context

Filters

Exam 1: An Introduction to Investments Private

Which of the following is not an investment in thelayperson's general use of the term

Diversification reduces

The investor should specify the objectives of investing.

CFA is a professional designation for individuals seeking positions as portfolio managers.

Many investments such as stock have commoncharacteristics including1. existence of secondary markets2. risk3. potential for capital gains

Reasons for saving and investing include1. need for funds to meet emergencies2. retirement income3. desire to leave an estate for children

Trading implies

Which of the following is an investment as definedby an economist

Financial investments are made in efficient markets.The existence of these markets suggests that

The anticipated return and the realized return often differ.

Risk

Investments are made in anticipation of a return.

Stocks are initially sold in the "primary" market and subsequently traded in the "secondary" market.

Liquidity refers to the ease of selling a stock for a capital gain.

Portfolio assessment should include measures of both risk and return.

The terms "investing" and "trading" refer to purchasing and selling securities.

Capital gains are the sole source of the return on an investment.

An informed investor can expect to consistently outperform the market.

Efficient markets suggests that investors will outperform the market consistently.

Risk is the uncertainty that the realized return may differ from the expected.

Securities Markets

The Time Value of Money Private

Financial Planning, Taxation, and the Efficiency of Financial Markets

Risk and Portfolio Management

Investment Companies: Mutual Funds Private

Closed-End Investment Companies, Real Estate Investment Trusts Reits, and Exchange-Traded Funds Etfs Private

Stock Private

The Valuation of Stock Private

Investment Returns and Aggregate Measures of Stock Markets

The Macroeconomic Environment for Investment

Behavioral Finance and Technical Analysis

The Bond Market Private

The Valuation of Fixed Income Securities

Government Securities

Convertible Bonds and Convertible Preferred Stock

An Introduction to Options

Option Valuation and Strategies Private

Commodity and Financial Futures Private

Financial Planning and Investing in an Efficient Market Context

Filters