Question 1

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 2

Which of the following is not a true statement?

Accepted Answer

A)  Dividends are a distribution of money, stock, or other property to stockholders. 
B)  Dividend income must be reported to the CCRA. 
C)  Dividends are taxed as capital gains. 
D)  Dividends are not taxed as ordinary income. 
E)  Generally, the payer will send you or your broker a form that states how much dividend income you have received. 
A)  Dividends are a distribution of money, stock, or other property to stockholders. 
B)  Dividend income must be reported to the CCRA. 
C)  Dividends are taxed as capital gains. 
D)  Dividends are not taxed as ordinary income. 
E)  Generally, the payer will send you or your broker a form that states how much dividend income you have received.

Question 3

Which of the following is not a true statement?

Accepted Answer

A)  Real estate ownership represents one of the best hedges against inflation. 
B)  Poor location can cause a piece of real estate property to go down in value. 
C)  There are many factors to consider before investing in real estate. 
D)  There is no reason to evaluate a real estate investment because real estate always increases in value sooner or later. 
E)  Finding a buyer for a piece of real estate can be difficult if loan money is scarce. 
A)  Real estate ownership represents one of the best hedges against inflation. 
B)  Poor location can cause a piece of real estate property to go down in value. 
C)  There are many factors to consider before investing in real estate. 
D)  There is no reason to evaluate a real estate investment because real estate always increases in value sooner or later. 
E)  Finding a buyer for a piece of real estate can be difficult if loan money is scarce.

Question 4

Preferred stock represents the most basic form of corporate ownership.

Accepted Answer

A) True 
 B)False

Question 5

The basic idea behind a hedge fund is to take two simultaneous positions in two different investments in order to reduce risk.

Accepted Answer

A) True 
 B)False

Question 6

A line of credit is a short-term loan that is approved before the money is actually needed.

Accepted Answer

A) True 
 B)False

Question 7

Which of the following was not found to be a critical factor in investing psychology?

Accepted Answer

A)  greed 
B)  stubbornness 
C)  loss aversion 
D)  endowment effect 
E)  cognitive bias 
A)  greed 
B)  stubbornness 
C)  loss aversion 
D)  endowment effect 
E)  cognitive bias

Question 8

If interest rates in the overall economy decrease, what will happen to the market value of a corporate bond with a fixed interest rate?

Accepted Answer

A)  The value of the bond will increase. 
B)  The bond is worthless. 
C)  The value of the bond will decrease. 
D)  The value of the bond will not change. 
E)  It is impossible to determine if the bond's value will increase or decrease. 
A)  The value of the bond will increase. 
B)  The bond is worthless. 
C)  The value of the bond will decrease. 
D)  The value of the bond will not change. 
E)  It is impossible to determine if the bond's value will increase or decrease.

Question 9

Leveraged investing in common shares is expected to increase your net worth.

Accepted Answer

A) True 
 B)False

Question 10

The risk factors associated with a specific investment

Accepted Answer

A)  can change over time 
B)  can include interest rate rick 
C)  can include inflation risk. 
D)  can include market risk. 
E)  can include all of the choices. 
A)  can change over time 
B)  can include interest rate rick 
C)  can include inflation risk. 
D)  can include market risk. 
E)  can include all of the choices.

Question 11

After the death of her husband, Gina Balmer, 35, received a check for $350,000 from a life insurance company. Ms. Balmer has two small children and wants to make sure that both she and the children are taken care of in the future. Based on this information, which of the investment factors listed below would be the most important to Ms. Balmer in her investment program?

Accepted Answer

A)  beta 
B)  safety 
C)  business failure 
D)  market risk 
E)  liquidity 
A)  beta 
B)  safety 
C)  business failure 
D)  market risk 
E)  liquidity

Question 12

Jamie Lynn earns $40,000 a year. Her monthly expenses total $1,700. What is the minimum amount of money that Ms. Lynn should set aside in an emergency fund?

Accepted Answer

A)  $1,700 
B)  $3,400 
C)  $5,100 
D)  $8,400 
E)  $10,000 
A)  $1,700 
B)  $3,400 
C)  $5,100 
D)  $8,400 
E)  $10,000

Question 13

A good rule of thumb is to limit installment payments to ____________ percent of your net monthly income.

Accepted Answer

A)  8 
B)  20 
C)  25 
D)  10 
E)  30 
A)  8 
B)  20 
C)  25 
D)  10 
E)  30

Question 14

Which of the following statements is not true?

Accepted Answer

A)  An investor seeking global diversification with less than $200,000 to invest should invest in global mutual funds. 
B)  Changes in currency exchange rate may affect the return on your investment. 
C)  Today, more and more investors are investing in stocks and bonds issued by foreign firms and global mutual funds. 
D)  An investor in Canada cannot purchase shares in a foreign company. 
E)  Because of international accounting rules, evaluating foreign investments is more difficult than evaluating investments in Canada. 
A)  An investor seeking global diversification with less than $200,000 to invest should invest in global mutual funds. 
B)  Changes in currency exchange rate may affect the return on your investment. 
C)  Today, more and more investors are investing in stocks and bonds issued by foreign firms and global mutual funds. 
D)  An investor in Canada cannot purchase shares in a foreign company. 
E)  Because of international accounting rules, evaluating foreign investments is more difficult than evaluating investments in Canada.

Question 15

Statistical averages show trends and direction, but they do not pinpoint the actual value of a specific investment.

Accepted Answer

A) True 
 B)False

Question 16

Today, federal, provincial, and local governments and most corporations have a home page where you can obtain valuable information.

Accepted Answer

A) True 
 B)False

Question 17

When starting an investment program, you should participate in an elective savings program.

Accepted Answer

A) True 
 B)False

Question 18

Which of the following is not a business periodical?

Accepted Answer

A)  Report on Business 
B)  Business Week 
C)  The Economist 
D)  Canadian Banker 
E)  Canadian Business 
A)  Report on Business 
B)  Business Week 
C)  The Economist 
D)  Canadian Banker 
E)  Canadian Business

Question 19

Investments in commodities and options are all of the following except

Accepted Answer

A)  are more speculative investments 
B)  usually stress immediate returns 
C)  usually stress long-term growth 
D)  are higher risk than GICs 
E)  are higher risk than common stocks 
A)  are more speculative investments 
B)  usually stress immediate returns 
C)  usually stress long-term growth 
D)  are higher risk than GICs 
E)  are higher risk than common stocks

Question 20

Which of the following investments offers the least liquidity?

Accepted Answer

A)  bank accounts 
B)  government bonds 
C)  real estate 
D)  common stock 
E)  preferred stock 
A)  bank accounts 
B)  government bonds 
C)  real estate 
D)  common stock 
E)  preferred stock

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

Which of the following is not a true statement?

Which of the following is not a true statement?

Preferred stock represents the most basic form of corporate ownership.

The basic idea behind a hedge fund is to take two simultaneous positions in two different investments in order to reduce risk.

A line of credit is a short-term loan that is approved before the money is actually needed.

Which of the following was not found to be a critical factor in investing psychology?

If interest rates in the overall economy decrease, what will happen to the market value of a corporate bond with a fixed interest rate?

Leveraged investing in common shares is expected to increase your net worth.

The risk factors associated with a specific investment

Jamie Lynn earns $40,000 a year. Her monthly expenses total $1,700. What is the minimum amount of money that Ms. Lynn should set aside in an emergency fund?

A good rule of thumb is to limit installment payments to ____________ percent of your net monthly income.

Which of the following statements is not true?

Statistical averages show trends and direction, but they do not pinpoint the actual value of a specific investment.

Today, federal, provincial, and local governments and most corporations have a home page where you can obtain valuable information.

When starting an investment program, you should participate in an elective savings program.

Which of the following is not a business periodical?

Investments in commodities and options are all of the following except

Which of the following investments offers the least liquidity?

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

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

Which of the following is not a true statement?

Which of the following is not a true statement?

Preferred stock represents the most basic form of corporate ownership.

The basic idea behind a hedge fund is to take two simultaneous positions in two different investments in order to reduce risk.

A line of credit is a short-term loan that is approved before the money is actually needed.

Which of the following was not found to be a critical factor in investing psychology?

If interest rates in the overall economy decrease, what will happen to the market value of a corporate bond with a fixed interest rate?

Leveraged investing in common shares is expected to increase your net worth.

The risk factors associated with a specific investment

Jamie Lynn earns $40,000 a year. Her monthly expenses total $1,700. What is the minimum amount of money that Ms. Lynn should set aside in an emergency fund?

A good rule of thumb is to limit installment payments to ____________ percent of your net monthly income.

Which of the following statements is not true?

Statistical averages show trends and direction, but they do not pinpoint the actual value of a specific investment.

Today, federal, provincial, and local governments and most corporations have a home page where you can obtain valuable information.

When starting an investment program, you should participate in an elective savings program.

Which of the following is not a business periodical?

Investments in commodities and options are all of the following except

Which of the following investments offers the least liquidity?

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