Question 1

Which of the following investors would mostly prefer speculative investments over conservative investments?

Accepted Answer

A)  A 25-year-old single investor who does not have an emergency fund 
B)  An unemployed single parent who just received a $300,000 divorce settlement 
C)  A 70-year-old who uses his dividends and interest to pay his monthly bills 
D)  A dual-career couple in their 30s whose combined income is $95,000 
E)  A retired couple with $850,000 in retirement savings 
A)  A 25-year-old single investor who does not have an emergency fund 
B)  An unemployed single parent who just received a $300,000 divorce settlement 
C)  A 70-year-old who uses his dividends and interest to pay his monthly bills 
D)  A dual-career couple in their 30s whose combined income is $95,000 
E)  A retired couple with $850,000 in retirement savings

Question 2

Define three of the six terms presented here:
a.Corporate bond.
b.Bond indenture.
c.Trustee.
d.Mortgage bond.
e.Debenture bond.
f.Convertible bond.

Accepted Answer

(A)A corporate bond is a corporation's w

Question 3

Which of the following investments is the most liquid?

Accepted Answer

A)  Certificate of deposit 
B)  Corporate bond 
C)  Interest-bearing checking account 
D)  Municipal bond 
E)  Preferred stock 
A)  Certificate of deposit 
B)  Corporate bond 
C)  Interest-bearing checking account 
D)  Municipal bond 
E)  Preferred stock

Question 4

When investing,an investor should not

Accepted Answer

A)  Evaluate potential investments. 
B)  Let the investments manage themselves. 
C)  Monitor the value of investments. 
D)  Keep accurate records. 
E)  Consider tax consequences of selling investments. 
A)  Evaluate potential investments. 
B)  Let the investments manage themselves. 
C)  Monitor the value of investments. 
D)  Keep accurate records. 
E)  Consider tax consequences of selling investments.

Question 5

A bond that is repaid from the income generated by the project it is designed to finance is called a(n)

Accepted Answer

A)  Treasury bill. 
B)  Savings bond. 
C)  Revenue bond. 
D)  General obligation bond. 
E)  Agency bond. 
A)  Treasury bill. 
B)  Savings bond. 
C)  Revenue bond. 
D)  General obligation bond. 
E)  Agency bond.

Question 6

A common way of saying you need to diversify your investments is

Accepted Answer

A)  A bird in the hand is worth two in the bush. 
B)  A stitch in time saves nine. 
C)  Birds of a feather flock together. 
D)  Don't judge a book by its cover. 
E)  Don't put all of your eggs in one basket. 
A)  A bird in the hand is worth two in the bush. 
B)  A stitch in time saves nine. 
C)  Birds of a feather flock together. 
D)  Don't judge a book by its cover. 
E)  Don't put all of your eggs in one basket.

Question 7

In general,bond rating categories are similar to school grading scales with A being better than
C.

Accepted Answer

A) True 
 B)False

Question 8

Timothy Calibe owns common stock in XYZWidgets.com.To reduce his business failure risk,he should

Accepted Answer

A)  Buy more common stock in XYZWidgets.com. 
B)  Buy preferred stock in XYZWidgets.com. 
C)  Buy bonds in XYZWidgets.com. 
D)  Continue to evaluate his investment in XYZWidgets.com after the purchase. 
E)  Any of these would reduce his business failure risk. 
A)  Buy more common stock in XYZWidgets.com. 
B)  Buy preferred stock in XYZWidgets.com. 
C)  Buy bonds in XYZWidgets.com. 
D)  Continue to evaluate his investment in XYZWidgets.com after the purchase. 
E)  Any of these would reduce his business failure risk.

Question 9

Market risk is associated with fluctuations in the market due to

Accepted Answer

A)  A reduction in buying power. 
B)  Changes in interest rates. 
C)  Bad management and/or unsuccessful products. 
D)  Economic conditions. 
E)  Predictable sources of income. 
A)  A reduction in buying power. 
B)  Changes in interest rates. 
C)  Bad management and/or unsuccessful products. 
D)  Economic conditions. 
E)  Predictable sources of income.

Question 10

Which of the following is not one of the four components of risk to be considered when evaluating investments?

Accepted Answer

A)  Business failure 
B)  Inflation 
C)  Interest rate 
D)  Market 
E)  Stock 
A)  Business failure 
B)  Inflation 
C)  Interest rate 
D)  Market 
E)  Stock

Question 11

If you are unable to make your credit card payments,you should not contact your credit card company.

Accepted Answer

A) True 
 B)False

Question 12

The potential return on any investment should

Accepted Answer

A)  Be directly related to the risk the investor assumes. 
B)  Be inversely related to the risk of the investment. 
C)  Not have any relationship to the risk of any investment. 
D)  Be inversely related to the risk the investor assumes. 
E)  Be guaranteed. 
A)  Be directly related to the risk the investor assumes. 
B)  Be inversely related to the risk of the investment. 
C)  Not have any relationship to the risk of any investment. 
D)  Be inversely related to the risk the investor assumes. 
E)  Be guaranteed.

Question 13

Which of the following would you expect to earn near 10% per year over the long term?

Accepted Answer

A)  Bonds 
B)  Certificates of deposit 
C)  Conservative portfolio 
D)  Savings account 
E)  Stocks 
A)  Bonds 
B)  Certificates of deposit 
C)  Conservative portfolio 
D)  Savings account 
E)  Stocks

Question 14

To investors,liquidity means their investments will increase in value.

Accepted Answer

A) True 
 B)False

Question 15

Young investors are often more interested in ______ portfolios than older investors.

Accepted Answer

A)  growth-oriented 
B)  government bond 
C)  cash 
D)  conservative 
E)  safe mutual fund 
A)  growth-oriented 
B)  government bond 
C)  cash 
D)  conservative 
E)  safe mutual fund

Question 16

Which of the following investments typically has the largest potential investment return?

Accepted Answer

A)  Government bonds 
B)  Cash 
C)  Cash equivalents 
D)  Certificates of deposit 
E)  Stocks 
A)  Government bonds 
B)  Cash 
C)  Cash equivalents 
D)  Certificates of deposit 
E)  Stocks

Question 17

Which of the following is not a true statement?

Accepted Answer

A)  No one is going to make you save the money you need to start an investment program. 
B)  To be useful, investment objectives must be specific and measurable. 
C)  Investment goals must be tailored to the particular financial needs of the individual. 
D)  Because investment objectives deal with the future, it is useless to make long-term goals. 
E)  A long-term investment goal involves a period of five or more years. 
A)  No one is going to make you save the money you need to start an investment program. 
B)  To be useful, investment objectives must be specific and measurable. 
C)  Investment goals must be tailored to the particular financial needs of the individual. 
D)  Because investment objectives deal with the future, it is useless to make long-term goals. 
E)  A long-term investment goal involves a period of five or more years.

Question 18

Investors choose safe investments because they know there is a moderate chance that these investments will become worthless.

Accepted Answer

A) True 
 B)False

Question 19

When should you consider the tax consequences of selling your investments?

Accepted Answer

A)  When you make your own decisions 
B)  When you have professional help 
C)  When the taxes due are less than $300 per transaction 
D)  When you make your own decisions or when you have professional help 
E)  When you are working with professionals and taxes due are less than $300 per transaction 
A)  When you make your own decisions 
B)  When you have professional help 
C)  When the taxes due are less than $300 per transaction 
D)  When you make your own decisions or when you have professional help 
E)  When you are working with professionals and taxes due are less than $300 per transaction

Question 20

A discounted security means that the actual purchase price is trading at

Accepted Answer

A)  The face value. 
B)  Less than the maturity value. 
C)  Greater than the face value. 
D)  The value at maturity. 
E)  The expected interest rate. 
A)  The face value. 
B)  Less than the maturity value. 
C)  Greater than the face value. 
D)  The value at maturity. 
E)  The expected interest rate.

Which of the following investors would mostly prefer speculative investments over conservative investments?

Define three of the six terms presented here: a.Corporate bond. b.Bond indenture. c.Trustee. d.Mortgage bond. e.Debenture bond. f.Convertible bond.

Which of the following investments is the most liquid?

When investing,an investor should not

A bond that is repaid from the income generated by the project it is designed to finance is called a(n)

A common way of saying you need to diversify your investments is

In general,bond rating categories are similar to school grading scales with A being better than C.

Timothy Calibe owns common stock in XYZWidgets.com.To reduce his business failure risk,he should

Market risk is associated with fluctuations in the market due to

Which of the following is not one of the four components of risk to be considered when evaluating investments?

If you are unable to make your credit card payments,you should not contact your credit card company.

The potential return on any investment should

Which of the following would you expect to earn near 10% per year over the long term?

To investors,liquidity means their investments will increase in value.

Young investors are often more interested in ______ portfolios than older investors.

Which of the following investments typically has the largest potential investment return?

Which of the following is not a true statement?

Investors choose safe investments because they know there is a moderate chance that these investments will become worthless.

When should you consider the tax consequences of selling your investments?

A discounted security means that the actual purchase price is trading at

Personal Financial Planning in Action

Money Management Skills

Taxes in Your Financial Plan

Financial Services: Savings Plans and Payment Account

Consumer Credit: Advantages, Dis-Advantages, Sources, and Costs

Consumer Purchasing Strategies and Wise Buying of Motor Vehicles

Selecting and Financing Housing

Home and Automobile Insurance

Health and Disability Income Insurance

Financial Planning With Life Insurance

Investing in Stocks

Investing in Mutual Funds

Starting Early: Retirement and Estate Planning

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Exam 11: Investing Basics and Evaluating Bonds

Which of the following investors would mostly prefer speculative investments over conservative investments?

Define three of the six terms presented here: a.Corporate bond. b.Bond indenture. c.Trustee. d.Mortgage bond. e.Debenture bond. f.Convertible bond.

Which of the following investments is the most liquid?

When investing,an investor should not

A bond that is repaid from the income generated by the project it is designed to finance is called a(n)

A common way of saying you need to diversify your investments is

In general,bond rating categories are similar to school grading scales with A being better than C.

Timothy Calibe owns common stock in XYZWidgets.com.To reduce his business failure risk,he should

Market risk is associated with fluctuations in the market due to

Which of the following is not one of the four components of risk to be considered when evaluating investments?

If you are unable to make your credit card payments,you should not contact your credit card company.

The potential return on any investment should

Which of the following would you expect to earn near 10% per year over the long term?

To investors,liquidity means their investments will increase in value.

Young investors are often more interested in ______ portfolios than older investors.

Which of the following investments typically has the largest potential investment return?

Which of the following is not a true statement?

Investors choose safe investments because they know there is a moderate chance that these investments will become worthless.

When should you consider the tax consequences of selling your investments?

A discounted security means that the actual purchase price is trading at

Personal Financial Planning in Action

Money Management Skills

Taxes in Your Financial Plan

Financial Services: Savings Plans and Payment Account

Consumer Credit: Advantages, Dis-Advantages, Sources, and Costs

Consumer Purchasing Strategies and Wise Buying of Motor Vehicles

Selecting and Financing Housing

Home and Automobile Insurance

Health and Disability Income Insurance

Financial Planning With Life Insurance

Investing in Stocks

Investing in Mutual Funds

Starting Early: Retirement and Estate Planning

Filters