Question 1

If you are willing to accept only a moderate level of risk,you should invest in

Accepted Answer

A)  savings accounts. 
B)  small-cap technology stocks. 
C)  a stock mutual funds. 
D)  Treasury bills. 
A)  savings accounts. 
B)  small-cap technology stocks. 
C)  a stock mutual funds. 
D)  Treasury bills.

Question 2

Which of the following pairs of stocks seem to offer the most diversification benefits?

Accepted Answer

A)  Exxon - Consolidated Coal 
B)  Exxon - Tesla 
C)  Netflix - Merck Pharmaceuticals 
D)  Not enough information to accurately judge since correlation coefficients are not provided. 
A)  Exxon - Consolidated Coal 
B)  Exxon - Tesla 
C)  Netflix - Merck Pharmaceuticals 
D)  Not enough information to accurately judge since correlation coefficients are not provided.

Question 3

________ increase risk while ________ decrease risk in a portfolio.

Accepted Answer

A)  Stocks; bonds 
B)  Bonds; mutual funds 
C)  Bonds; REITs 
D)  Mutual funds; stocks 
A)  Stocks; bonds 
B)  Bonds; mutual funds 
C)  Bonds; REITs 
D)  Mutual funds; stocks

Question 4

During the financial crisis in 2008-2009,investors who were diversified across industries

Accepted Answer

A)  experienced no losses. 
B)  experienced large gains. 
C)  experienced significant losses because most industries were suffering from weak economic conditions. 
D)  experienced losses in financial services companies but not in other industries. 
A)  experienced no losses. 
B)  experienced large gains. 
C)  experienced significant losses because most industries were suffering from weak economic conditions. 
D)  experienced losses in financial services companies but not in other industries.

Question 5

The first step in applying asset allocation to your personal financial plan is to ensure adequate liquidity.

Accepted Answer

A) True 
 B)False

Question 6

You can reduce investment risk by investing in

Accepted Answer

A)  a corporate bond. 
B)  a portfolio of investments. 
C)  corporate stocks. 
D)  real estate. 
A)  a corporate bond. 
B)  a portfolio of investments. 
C)  corporate stocks. 
D)  real estate.

Question 7

When you compile a portfolio of stocks,you should avoid including stocks that exhibit

Accepted Answer

A)  a high negative correlation. 
B)  a high positive correlation. 
C)  no correlation. 
D)  an inverse correlation. 
A)  a high negative correlation. 
B)  a high positive correlation. 
C)  no correlation. 
D)  an inverse correlation.

Question 8

According to the text,many investment advisors recommend ________% of foreign stocks for a diversified portfolio.

Accepted Answer

A)  0 
B)  10 
C)  20 
D)  30 
A)  0 
B)  10 
C)  20 
D)  30

Question 9

Advantages of investing in REITs are that

Accepted Answer

A)  shares can be purchased directly from the company. 
B)  the shareholders decide which properties to buy and sell. 
C)  the managers take care of maintenance. 
D)  the income is nontaxable. 
A)  shares can be purchased directly from the company. 
B)  the shareholders decide which properties to buy and sell. 
C)  the managers take care of maintenance. 
D)  the income is nontaxable.

Question 10

Individuals in an early stage of their careers can take ________ investment risk than those in the retirement stage.

Accepted Answer

A)  less 
B)  greater 
C)  equal 
D)  reduced 
A)  less 
B)  greater 
C)  equal 
D)  reduced

If you are willing to accept only a moderate level of risk,you should invest in

Which of the following pairs of stocks seem to offer the most diversification benefits?

increase risk while decrease risk in a portfolio.

During the financial crisis in 2008-2009,investors who were diversified across industries

The first step in applying asset allocation to your personal financial plan is to ensure adequate liquidity.

You can reduce investment risk by investing in

When you compile a portfolio of stocks,you should avoid including stocks that exhibit

According to the text,many investment advisors recommend ________% of foreign stocks for a diversified portfolio.

Advantages of investing in REITs are that

Individuals in an early stage of their careers can take ________ investment risk than those in the retirement stage.

Overview of a Financial Plan

Planning With Personal Financial Statements

Applying Time Value Concepts

Using Tax Concepts for Planning

Banking and Interest Rates

Managing Your Money

Assessing and Securing Your Credit

Managing Your Credit

Personal Loans

Purchasing and Financing a Home

Auto and Homeowners Insurance

Health and Disability Insurance

Life Insurance

Investing Fundamentals

Investing in Stocks

Investing in Bonds

Investing in Mutual Funds

Retirement Planning

Estate Planning

Integrating the Components of a Financial Plan

Filters

Exam 18: Asset Allocation

If you are willing to accept only a moderate level of risk,you should invest in

Which of the following pairs of stocks seem to offer the most diversification benefits?

________ increase risk while ________ decrease risk in a portfolio.

During the financial crisis in 2008-2009,investors who were diversified across industries

The first step in applying asset allocation to your personal financial plan is to ensure adequate liquidity.

You can reduce investment risk by investing in

When you compile a portfolio of stocks,you should avoid including stocks that exhibit

According to the text,many investment advisors recommend ________% of foreign stocks for a diversified portfolio.

Advantages of investing in REITs are that

Individuals in an early stage of their careers can take ________ investment risk than those in the retirement stage.

Overview of a Financial Plan

Planning With Personal Financial Statements

Applying Time Value Concepts

Using Tax Concepts for Planning

Banking and Interest Rates

Managing Your Money

Assessing and Securing Your Credit

Managing Your Credit

Personal Loans

Purchasing and Financing a Home

Auto and Homeowners Insurance

Health and Disability Insurance

Life Insurance

Investing Fundamentals

Investing in Stocks

Investing in Bonds

Investing in Mutual Funds

Retirement Planning

Estate Planning

Integrating the Components of a Financial Plan

Filters

increase risk while decrease risk in a portfolio.