Question 1

Anne Marie earns $25,000 a year. Her monthly expenses total $1,200. What is the minimum amount of money that Ms. Lynn should set aside in an emergency fund?

Accepted Answer

A)  $1,200 
B)  $1,800 
C)  $2,400 
D)  $3,600 
E)  $12,500 
A)  $1,200 
B)  $1,800 
C)  $2,400 
D)  $3,600 
E)  $12,500

Question 2

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 3

An investment alternative in the form of an annuity that is similar to a mutual fund but that is less risky as it provides a certain degree of insurance to the investor is a (an) __________

Accepted Answer

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

Question 4

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 5

Once you have painstakingly developed a financial plan, it is not wise to change it.

Accepted Answer

A) True 
 B)False

Question 6

Which of the following is the most readily available source of information for an investor?

Accepted Answer

A)  the daily newspaper 
B)  government publications 
C)  corporate reports 
D)  investor newsletters 
E)  business periodicals 
A)  the daily newspaper 
B)  government publications 
C)  corporate reports 
D)  investor newsletters 
E)  business periodicals

Question 7

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 plan more than five years in the future. 
E)  A long-term investment objective involves a time period of five years or more. 
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 plan more than five years in the future. 
E)  A long-term investment objective involves a time period of five years or more.

Question 8

Which of the following investments would rank the highest with regard to being speculative?

Accepted Answer

A)  savings bonds 
B)  GICs 
C)  preferred stock 
D)  corporate bonds 
E)  options 
A)  savings bonds 
B)  GICs 
C)  preferred stock 
D)  corporate bonds 
E)  options

Question 9

Under current tax laws, capital losses can be

Accepted Answer

A)  simply lost. 
B)  used to offset capital gains. 
C)  used to reduce your last year's tax amount. 
D)  used to offset dividend income. 
E)  used to offset interest and rental income. 
A)  simply lost. 
B)  used to offset capital gains. 
C)  used to reduce your last year's tax amount. 
D)  used to offset dividend income. 
E)  used to offset interest and rental income.

Question 10

Describe the sources of investment information investors can use to evaluate a potential investment.

Accepted Answer

In Chapter 10, the following sources of

Question 11

Investing in global may result in investors experiencing ____________ risk.

Accepted Answer

A)  currency exchange rate 
B)  interest rate 
C)  inflation. 
D)  market 
E)  income 
A)  currency exchange rate 
B)  interest rate 
C)  inflation. 
D)  market 
E)  income

Question 12

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)  government bonds 
D)  gemstones 
E)  preferred stock 
A)  corporate bonds 
B)  guaranteed investment certificates 
C)  government bonds 
D)  gemstones 
E)  preferred stock

Question 13

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

Accepted Answer

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

Question 14

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 15

The money obtained 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)  has been allocated to retirement programs. 
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)  has been allocated to retirement programs.

Question 16

The average investor cannot afford to purchase much of the investment information available from the government.

Accepted Answer

A) True 
 B)False

Question 17

Which of the following investments offers the greatest growth potential?

Accepted Answer

A)  bank accounts 
B)  common stock 
C)  corporate bonds 
D)  government bonds 
E)  option bonds 
A)  bank accounts 
B)  common stock 
C)  corporate bonds 
D)  government bonds 
E)  option bonds

Question 18

Matt Jacobs is single and 24. He has just graduated from college and obtained a job making $26,400 a year. He would like to establish a long-term investment program. Which of the following investments would you recommend for his investment program?

Accepted Answer

A)  growth stocks 
B)  government bonds 
C)  corporate bonds 
D)  commodities 
E)  a money-market fund 
A)  growth stocks 
B)  government bonds 
C)  corporate bonds 
D)  commodities 
E)  a money-market fund

Question 19

An emergency fund is a certain amount of money that can be obtained quickly in case of immediate need.

Accepted Answer

A) True 
 B)False

Question 20

The maturity dates for most bonds range between ____________ years.

Accepted Answer

A)  0 to 5 
B)  5 to 15 
C)  10 to 15 
D)  1 to 30 
E)  1 to 40 
A)  0 to 5 
B)  5 to 15 
C)  10 to 15 
D)  1 to 30 
E)  1 to 40

Anne Marie earns $25,000 a year. Her monthly expenses total $1,200. What is the minimum amount of money that Ms. Lynn should set aside in an emergency fund?

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

An investment alternative in the form of an annuity that is similar to a mutual fund but that is less risky as it provides a certain degree of insurance to the investor is a (an) __________

An investor can make money on a common stock investment by

Once you have painstakingly developed a financial plan, it is not wise to change it.

Which of the following is the most readily available source of information for an investor?

Which of the following is not a true statement?

Which of the following investments would rank the highest with regard to being speculative?

Under current tax laws, capital losses can be

Describe the sources of investment information investors can use to evaluate a potential investment.

Investing in global may result in investors experiencing ____________ risk.

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

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

Which of the following statements is not true?

The money obtained from selling corporate bonds

The average investor cannot afford to purchase much of the investment information available from the government.

Which of the following investments offers the greatest growth potential?

Matt Jacobs is single and 24. He has just graduated from college and obtained a job making $26,400 a year. He would like to establish a long-term investment program. Which of the following investments would you recommend for his investment program?

An emergency fund is a certain amount of money that can be obtained quickly in case of immediate need.

The maturity dates for most bonds range between ____________ years.

Personal Financial Planning: An Introduction

Money Management Strategy: Financial Statements and Budgeting

Planning Your Tax Strategy

The Banking Services of Financial Institutions

Introduction to Consumer Credit

Choosing a Source 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

Anne Marie earns $25,000 a year. Her monthly expenses total $1,200. What is the minimum amount of money that Ms. Lynn should set aside in an emergency fund?

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

An investment alternative in the form of an annuity that is similar to a mutual fund but that is less risky as it provides a certain degree of insurance to the investor is a (an) __________

An investor can make money on a common stock investment by

Once you have painstakingly developed a financial plan, it is not wise to change it.

Which of the following is the most readily available source of information for an investor?

Which of the following is not a true statement?

Which of the following investments would rank the highest with regard to being speculative?

Under current tax laws, capital losses can be

Describe the sources of investment information investors can use to evaluate a potential investment.

Investing in global may result in investors experiencing ____________ risk.

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

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

Which of the following statements is not true?

The money obtained from selling corporate bonds

The average investor cannot afford to purchase much of the investment information available from the government.

Which of the following investments offers the greatest growth potential?

Matt Jacobs is single and 24. He has just graduated from college and obtained a job making $26,400 a year. He would like to establish a long-term investment program. Which of the following investments would you recommend for his investment program?

An emergency fund is a certain amount of money that can be obtained quickly in case of immediate need.

The maturity dates for most bonds range between ____________ years.

Personal Financial Planning: An Introduction

Money Management Strategy: Financial Statements and Budgeting

Planning Your Tax Strategy

The Banking Services of Financial Institutions

Introduction to Consumer Credit

Choosing a Source 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