Question 1

The term "investment" in economics generally does not refer to the purchase of securities.

Accepted Answer

A) True 
 B)False

Question 2

Reinvestment rate risk refers to fluctuations in

Accepted Answer

A)  a stock's price 
B)  a stock's dividend 
C)  rates earned when funds are reinvested 
D)  the cost of an investment 
A)  a stock's price 
B)  a stock's dividend 
C)  rates earned when funds are reinvested 
D)  the cost of an investment

Question 3

Unsystematic risk

Accepted Answer

A)  is increased through diversification 
B)  is reduced when markets fluctuate less 
C)  is affected by the nature of how a firm finances its operations 
D)  increases during periods of volatile interest rates 
A)  is increased through diversification 
B)  is reduced when markets fluctuate less 
C)  is affected by the nature of how a firm finances its operations 
D)  increases during periods of volatile interest rates

Question 4

Investors seek to minimize risk for a given return.

Accepted Answer

A) True 
 B)False

Question 5

Exchange rate risk refers to fluctuations in

Accepted Answer

A)  the prices of stocks on the New York Stock Exchange 
B)  the values of bonds and other debt instruments 
C)  the price of one currency relative to other currencies 
D)  the value of the investor's portfolio 
A)  the prices of stocks on the New York Stock Exchange 
B)  the values of bonds and other debt instruments 
C)  the price of one currency relative to other currencies 
D)  the value of the investor's portfolio

Question 6

Sources of risk to the investor include
1)loss of income when funds are reinvested
2)fluctuations in security markets
3)the financing decisions of the firm

Accepted Answer

A)  1 and 2 
B)  1 and 3 
C)  2 and 3 
D)  all of these choices 
A)  1 and 2 
B)  1 and 3 
C)  2 and 3 
D)  all of these choices

Question 7

The negative relationship between interest rates and securities prices is the source of interest rate risk.

Accepted Answer

A) True 
 B)False

Question 8

Unsystematic risk considers how firms finance their assets and the nature of their operations.

Accepted Answer

A) True 
 B)False

Question 9

Investors may reduce risk by constructing diversified portfolios but not eliminate risk.

Accepted Answer

A) True 
 B)False

The term "investment" in economics generally does not refer to the purchase of securities.

Reinvestment rate risk refers to fluctuations in

Unsystematic risk

Investors seek to minimize risk for a given return.

Exchange rate risk refers to fluctuations in

Sources of risk to the investor include 1)loss of income when funds are reinvested 2)fluctuations in security markets 3)the financing decisions of the firm

The negative relationship between interest rates and securities prices is the source of interest rate risk.

Unsystematic risk considers how firms finance their assets and the nature of their operations.

Investors may reduce risk by constructing diversified portfolios but not eliminate risk.

The Creation of Financial Assets

Securities Markets

The Time Value of Money

The Tax Environment

Risk and Portfolio Management

Investment Companies: Mutual Funds

Closed-End Investment Companies

The Valuation of Common Stock

Investment Returns and Aggregate Measures of Stock Markets

Dividends: Past, present, and Future

The Macroeconomic Environment for Investment Decisions

Analysis of Financial Statements

Behavioral Finance and Technical Analysis

The Bond Market

The Valuation of Fixed-Income Securities

Government Securities

Convertible Bonds and Convertible Preferred Stock

An Introduction to Options

Option Valuation and Strategies

Commodity and Financial Futures

Investing in Foreign Securities

Investing in Nonfinancial Assets: Collectibles, resources, and Real Estate

Portfolio Planning and Management in an Efficient Market Context

Filters

Exam 1: An Introduction to Investments

The term "investment" in economics generally does not refer to the purchase of securities.

Reinvestment rate risk refers to fluctuations in

Unsystematic risk

Investors seek to minimize risk for a given return.

Exchange rate risk refers to fluctuations in

Sources of risk to the investor include 1)loss of income when funds are reinvested 2)fluctuations in security markets 3)the financing decisions of the firm

The negative relationship between interest rates and securities prices is the source of interest rate risk.

Unsystematic risk considers how firms finance their assets and the nature of their operations.

Investors may reduce risk by constructing diversified portfolios but not eliminate risk.

The Creation of Financial Assets

Securities Markets

The Time Value of Money

The Tax Environment

Risk and Portfolio Management

Investment Companies: Mutual Funds

Closed-End Investment Companies

The Valuation of Common Stock

Investment Returns and Aggregate Measures of Stock Markets

Dividends: Past, present, and Future

The Macroeconomic Environment for Investment Decisions

Analysis of Financial Statements

Behavioral Finance and Technical Analysis

The Bond Market

The Valuation of Fixed-Income Securities

Government Securities

Convertible Bonds and Convertible Preferred Stock

An Introduction to Options

Option Valuation and Strategies

Commodity and Financial Futures

Investing in Foreign Securities

Investing in Nonfinancial Assets: Collectibles, resources, and Real Estate

Portfolio Planning and Management in an Efficient Market Context

Filters