Question 1

Define risk in the context of investments?

Accepted Answer

Risk is the chance t

Question 2

What are some of the reasons driving so many individual investors to manage their own investments today,versus the conventional route of investing through a financial advisor,or stockbroker?

Accepted Answer

The emergence of the Internet has produc

Question 3

The two major considerations in investing are return and timing.

Accepted Answer

A) True 
 B)False

Question 4

Investors always seek to minimize their risk of investing.

Accepted Answer

A) True 
 B)False

Question 5

All of the following are benefits of geographic diversification in investment portfolios EXCEPT:

Accepted Answer

A) Gaining exposure to currencies other than the U.S.dollar. 
B) Some global markets have growth rates higher than the U.S.,offering potentially higher returns. 
C) Global markets behave completely independently of U.S.markets. 
D) Many global markets are not highly correlated with U.S.markets. 
A) Gaining exposure to currencies other than the U.S.dollar. 
B) Some global markets have growth rates higher than the U.S.,offering potentially higher returns. 
C) Global markets behave completely independently of U.S.markets. 
D) Many global markets are not highly correlated with U.S.markets.

Question 6

Which of the following investment areas is heavily tied to work using mathematical and statistical models?

Accepted Answer

A) Security analysis 
B) Portfolio management 
C) Institutional investing 
D) Retirement planning 
A) Security analysis 
B) Portfolio management 
C) Institutional investing 
D) Retirement planning

Question 7

In general,the ex ante risk-return tradeoff

Accepted Answer

A) slopes upward. 
B) slopes downward 
C) is flat 
D) is impossible to determine. 
A) slopes upward. 
B) slopes downward 
C) is flat 
D) is impossible to determine.

Question 8

Security analysts are typically employed only at brokerage houses.

Accepted Answer

A) True 
 B)False

Question 9

Gold coins would be classified as:

Accepted Answer

A) real assets 
B) indirect assets 
C) personal assets 
D) financial assets 
A) real assets 
B) indirect assets 
C) personal assets 
D) financial assets

Question 10

Most financial advisors are registered with the Securities and Exchange Commission as:

Accepted Answer

A) registered representatives. 
B) registered investment advisors. 
C) registered financial planners. 
D) registered securities consultants. 
A) registered representatives. 
B) registered investment advisors. 
C) registered financial planners. 
D) registered securities consultants.

Question 11

Another name for stockbrokers is:

Accepted Answer

A) specialists 
B) financial advisors 
C) security analysts 
D) portfolio managers 
A) specialists 
B) financial advisors 
C) security analysts 
D) portfolio managers

Question 12

Risk is defined as the possibility of loss.

Accepted Answer

A) True 
 B)False

Question 13

A 401(k)plan is an example of a defined benefit retirement plan.

Accepted Answer

A) True 
 B)False

Question 14

Investment professionals who take companies public,arrange mergers and acquisitions,and participate in municipal bond issues are :

Accepted Answer

A) registered representatives 
B) security analysts 
C) investment bankers 
D) portfolio managers 
A) registered representatives 
B) security analysts 
C) investment bankers 
D) portfolio managers

Question 15

Which of the following would be considered a risk-free investment?

Accepted Answer

A) gold 
B) equity in a house 
C) high-grade corporate bonds 
D) U.S.Treasury bills 
A) gold 
B) equity in a house 
C) high-grade corporate bonds 
D) U.S.Treasury bills

Question 16

Investors enjoyed the best 5 consecutive years in the stock market history over the period 1996-2000.

Accepted Answer

A) True 
 B)False

Question 17

The risk-free rate of return (RFR)equals:

Accepted Answer

A) 3.5% 
B) the return on long-term Treasury bonds 
C) the average of the last 3 years' inflation rate 
D) the return on short-term Treasury bills 
A) 3.5% 
B) the return on long-term Treasury bonds 
C) the average of the last 3 years' inflation rate 
D) the return on short-term Treasury bills

Question 18

A Chartered Financial Analyst designation is a (an)

Accepted Answer

A) SEC-approved and awarded designation. 
B) certification of a successful investing record. 
C) professional designation awarded for meeting recognized standards of conduct and competency. 
D) professional designation awarded by the brokerage industry. 
A) SEC-approved and awarded designation. 
B) certification of a successful investing record. 
C) professional designation awarded for meeting recognized standards of conduct and competency. 
D) professional designation awarded by the brokerage industry.

Question 19

A 25-year old college graduate is participating in a 401(k)retirement plan and wishes to minimize risk by eliminating stock-based mutual funds and other equities from his investment portfolio.What will this probably do to his ending retirement funds in 40 years?

Accepted Answer

If he minimizes risk,then he w

Question 20

Which of the following is the best definition of wealth?

Accepted Answer

A) the sum of all current and future income 
B) the total of all assets and all income 
C) the total of assets and income less any liabilities. 
D) the sum of current income and the present value of future income. 
A) the sum of all current and future income 
B) the total of all assets and all income 
C) the total of assets and income less any liabilities. 
D) the sum of current income and the present value of future income.

Exam 1: Understanding Investments

Define risk in the context of investments?

What are some of the reasons driving so many individual investors to manage their own investments today,versus the conventional route of investing through a financial advisor,or stockbroker?

The two major considerations in investing are return and timing.

Investors always seek to minimize their risk of investing.

All of the following are benefits of geographic diversification in investment portfolios EXCEPT:

Which of the following investment areas is heavily tied to work using mathematical and statistical models?

In general,the ex ante risk-return tradeoff

Security analysts are typically employed only at brokerage houses.

Gold coins would be classified as:

Most financial advisors are registered with the Securities and Exchange Commission as:

Another name for stockbrokers is:

Risk is defined as the possibility of loss.

A 401(k)plan is an example of a defined benefit retirement plan.

Investment professionals who take companies public,arrange mergers and acquisitions,and participate in municipal bond issues are :

Which of the following would be considered a risk-free investment?

Investors enjoyed the best 5 consecutive years in the stock market history over the period 1996-2000.

The risk-free rate of return (RFR)equals:

A Chartered Financial Analyst designation is a (an)

A 25-year old college graduate is participating in a 401(k)retirement plan and wishes to minimize risk by eliminating stock-based mutual funds and other equities from his investment portfolio.What will this probably do to his ending retirement funds in 40 years?

Which of the following is the best definition of wealth?

Investment Alternatives

Indirect Investing

Securities Markets and Market Indexes

How Securities Are Traded

The Risks and Returns From Investing

Portfolio Theory

Portfolio Selection

Asset Pricing Models

Common Stock Valuation

Common Stocks: Analysis

Market Efficiency

Economy Market Analysis

Industry Analysis

Company Analysis

Technical Analysis

Bond Yields

Bonds: Analysis and Strategy

Options

Futures

Portfolio Management

Evaluation of Investment

Filters