Question 1

Which one of the following is not a true statement?

Accepted Answer

A) Most mutual funds invest in stocks, bonds, and other securities. 
B) Diversification provided by a mutual fund reduces risk. 
C) The goals of one mutual fund investor may differ from those of another. 
D) Since mutual fund managers are professionals, there is no need to evaluate a mutual fund. 
E) Mutual fund investments range from very conservative to very speculative investments. 
A) Most mutual funds invest in stocks, bonds, and other securities. 
B) Diversification provided by a mutual fund reduces risk. 
C) The goals of one mutual fund investor may differ from those of another. 
D) Since mutual fund managers are professionals, there is no need to evaluate a mutual fund. 
E) Mutual fund investments range from very conservative to very speculative investments.

Question 2

Which of the following is not a component of the risk factor?

Accepted Answer

A) Business Failure 
B) Inflation risk 
C) Interest rate risk 
D) Product risk 
E) Market risk 
A) Business Failure 
B) Inflation risk 
C) Interest rate risk 
D) Product risk 
E) Market risk

Question 3

A decrease in the value of stocks, bonds, or other investments may cause investors to experience ____________ risk.

Accepted Answer

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

Question 4

Which of the following statements is not true?

Accepted Answer

A) When establishing an investment program, you should begin by establishing your investment goals. 
B) When you are choosing an investment, you should examine the risk factor associated with each investment. 
C) When establishing an investment program, you should examine the potential return offered by different investment alternatives. 
D) Find a professional financial planner and leave the planning to the professional. 
E) Continue to evaluate the investments contained in your investment plan. 
A) When establishing an investment program, you should begin by establishing your investment goals. 
B) When you are choosing an investment, you should examine the risk factor associated with each investment. 
C) When establishing an investment program, you should examine the potential return offered by different investment alternatives. 
D) Find a professional financial planner and leave the planning to the professional. 
E) Continue to evaluate the investments contained in your investment plan.

Question 5

What is an example of a personal financial publication as a source of investment information?

Accepted Answer

A) National Post 
B) Business News Network 
C) Business Week 
D) Globe and Mail's Report on business 
E) MoneySaver 
A) National Post 
B) Business News Network 
C) Business Week 
D) Globe and Mail's Report on business 
E) MoneySaver

Question 6

The nationwide average increase is just over 7 percent for real estate investments.

Accepted Answer

A) True 
 B)False

Question 7

An intermediate-term objective is defined as one that will be accomplished within two to five years.

Accepted Answer

A) True 
 B)False

Question 8

Which of the following investments has the best rate of return when adjusted for inflation?

Accepted Answer

A) savings accounts 
B) corporate bonds 
C) Canadian treasury bills 
D) common stocks 
E) preferred stocks 
A) savings accounts 
B) corporate bonds 
C) Canadian treasury bills 
D) common stocks 
E) preferred stocks

Question 9

The amount put aside as an emergency fund should be equal to 1 to 3 months of living expenses.

Accepted Answer

A) True 
 B)False

Question 10

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

Accepted Answer

A) red-chip stocks 
B) options 
C) utility stocks 
D) corporate bonds 
E) preferred stock issues 
A) red-chip stocks 
B) options 
C) utility stocks 
D) corporate bonds 
E) preferred stock issues

Question 11

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 offered by your employer. 
C) Make a special savings effort one month per year. 
D) Borrow money specifically for investment purposes. 
E) Take advantage of gifts, inheritances, and windfalls. 
A) Pay bills first, and then save a reasonable amount of money for investment. 
B) Participate in an elective savings program offered by your employer. 
C) Make a special savings effort one month per year. 
D) Borrow money specifically for investment purposes. 
E) Take advantage of gifts, inheritances, and windfalls.

Question 12

The written pledge of a government or a municipality to repay a specified sum of money along with interest is called a _________

Accepted Answer

A) mutual fund. 
B) government bond. 
C) guaranteed investment certificate. 
D) government stock. 
E) option fund. 
A) mutual fund. 
B) government bond. 
C) guaranteed investment certificate. 
D) government stock. 
E) option fund.

Question 13

An investor can make money on a common stock investment by

Accepted Answer

A) waiting for the corporation to repurchase the stock. 
B) waiting for the stock's value to increase and then selling it. 
C) waiting for the stock's value to decrease and then selling it. 
D) waiting for the stock to reach the maturity date. 
E) converting the common stock to preferred stock. 
A) waiting for the corporation to repurchase the stock. 
B) waiting for the stock's value to increase and then selling it. 
C) waiting for the stock's value to decrease and then selling it. 
D) waiting for the stock to reach the maturity date. 
E) converting the common stock to preferred stock.

Question 14

Diversification of assets among several types of investments can increase risk.

Accepted Answer

A) True 
 B)False

Question 15

Which of the following is not a true statement?

Accepted Answer

A) A corporation generally obtains equity capital from stockholders. 
B) A corporation can issue both preferred stock and common stock. 
C) When a corporation is experiencing financial problems, an investor should purchase common rather than preferred stock. 
D) Most corporations sell common stock to satisfy a large part of their financing needs. 
E) The most important priority a preferred stockholder enjoys is receiving cash dividends before common stockholders receive cash dividends. 
A) A corporation generally obtains equity capital from stockholders. 
B) A corporation can issue both preferred stock and common stock. 
C) When a corporation is experiencing financial problems, an investor should purchase common rather than preferred stock. 
D) Most corporations sell common stock to satisfy a large part of their financing needs. 
E) The most important priority a preferred stockholder enjoys is receiving cash dividends before common stockholders receive cash dividends.

Question 16

Which of the following would not be considered a safe investment for a conservative investor?

Accepted Answer

A) corporate bonds 
B) guaranteed investment certificates 
C) passbook savings accounts 
D) blue-chip stocks 
E) collectibles 
A) corporate bonds 
B) guaranteed investment certificates 
C) passbook savings accounts 
D) blue-chip stocks 
E) collectibles

Question 17

A speculative investment is an 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 18

Which of the following statements does not accurately describe a line of credit?

Accepted Answer

A) A line of credit is already approved before the money is actually needed. 
B) A line of credit is a long-term loan. 
C) A line of credit can be obtained at a credit union, trust company, or bank. 
D) A line of credit provides an alternative source of funds if an emergency does develop. 
E) A line of credit is available immediately when needed. 
A) A line of credit is already approved before the money is actually needed. 
B) A line of credit is a long-term loan. 
C) A line of credit can be obtained at a credit union, trust company, or bank. 
D) A line of credit provides an alternative source of funds if an emergency does develop. 
E) A line of credit is available immediately when needed.

Question 19

A type of investment that combines and invests the funds of many investors and manages it with a professional manager is called a(n)

Accepted Answer

A) chequing account. 
B) securities exchange. 
C) guaranteed investment certificate. 
D) mutual fund. 
E) option fund. 
A) chequing account. 
B) securities exchange. 
C) guaranteed investment certificate. 
D) mutual fund. 
E) option fund.

Question 20

Which of the following investments offers the greatest liquidity?

Accepted Answer

A) collectibles 
B) common stock 
C) corporate bonds 
D) real estate 
E) bank accounts 
A) collectibles 
B) common stock 
C) corporate bonds 
D) real estate 
E) bank accounts

Which one of the following is not a true statement?

Which of the following is not a component of the risk factor?

A decrease in the value of stocks, bonds, or other investments may cause investors to experience ____________ risk.

Which of the following statements is not true?

What is an example of a personal financial publication as a source of investment information?

The nationwide average increase is just over 7 percent for real estate investments.

An intermediate-term objective is defined as one that will be accomplished within two to five years.

Which of the following investments has the best rate of return when adjusted for inflation?

The amount put aside as an emergency fund should be equal to 1 to 3 months of living expenses.

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

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

The written pledge of a government or a municipality to repay a specified sum of money along with interest is called a _________

An investor can make money on a common stock investment by

Diversification of assets among several types of investments can increase risk.

Which of the following is not a true statement?

Which of the following would not be considered a safe investment for a conservative investor?

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

Which of the following statements does not accurately describe a line of credit?

A type of investment that combines and invests the funds of many investors and manages it with a professional manager is called a(n)

Which of the following investments offers the greatest liquidity?

Personal Financial Planning: An Introduction

Money Management Strategy: Financial Statements and Budgeting

Planning Your Tax Strategy

Banking Services of Financial Institutions

Introduction to Consumer Credit

Choosing a Source of Credit: The Costs of Credit Alternatives

The Finances of Housing

Home and Automobile Insurance

Life, Health, and Disability Insurance

Investing in Stocks

Investing in Bonds

Investing in Mutual Funds

Retirement Planning

Estate Planning

Filters

Exam 10: Fundamentals of Investing

Which one of the following is not a true statement?

Which of the following is not a component of the risk factor?

A decrease in the value of stocks, bonds, or other investments may cause investors to experience ____________ risk.

Which of the following statements is not true?

What is an example of a personal financial publication as a source of investment information?

The nationwide average increase is just over 7 percent for real estate investments.

An intermediate-term objective is defined as one that will be accomplished within two to five years.

Which of the following investments has the best rate of return when adjusted for inflation?

The amount put aside as an emergency fund should be equal to 1 to 3 months of living expenses.

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

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

The written pledge of a government or a municipality to repay a specified sum of money along with interest is called a _________

An investor can make money on a common stock investment by

Diversification of assets among several types of investments can increase risk.

Which of the following is not a true statement?

Which of the following would not be considered a safe investment for a conservative investor?

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

Which of the following statements does not accurately describe a line of credit?

A type of investment that combines and invests the funds of many investors and manages it with a professional manager is called a(n)

Which of the following investments offers the greatest liquidity?

Personal Financial Planning: An Introduction

Money Management Strategy: Financial Statements and Budgeting

Planning Your Tax Strategy

Banking Services of Financial Institutions

Introduction to Consumer Credit

Choosing a Source of Credit: The Costs of Credit Alternatives

The Finances of Housing

Home and Automobile Insurance

Life, Health, and Disability Insurance

Investing in Stocks

Investing in Bonds

Investing in Mutual Funds

Retirement Planning

Estate Planning

Filters