Question 1

Younger investors tend to invest in more growth-oriented investments than older investors.

Accepted Answer

A) True 
 B)False  True

Question 2

Investors can typically find more information about stocks and mutual funds online than they can find for bonds.

Accepted Answer

A) True 
 B)False  True

Question 3

A corporate bond that is secured by various assets of the issuing firm is called a(n)____________ bond.

Accepted Answer

A)   debenture
B)   mortgage
C)   indenture
D)   preemptive
E)   treasury B

Question 4

Business failure risk

Accepted Answer

A)   Cannot be diversified.
B)   Causes the business to increase its dividends.
C)   In the worst case, leads to improved earnings.
D)   Is associated with government bonds.
E)   Leads to lower profitability than anticipated.

Question 5

Rebecca Gladlyn is interested in purchasing an LMN bond that pays 8% interest each year.The interest will be paid semiannually.How often should Rebecca receive interest?
 What amount should she receive?

Accepted Answer

The answer of Rebecca Gladlyn is interested in purchasing an...

Question 6

A good rule of thumb is to limit installment payments to ____________ of your net (after-tax)income.

Accepted Answer

A)   20%
B)   30%
C)   40%
D)   50%
E)   60%

Question 7

Which of the following describes a growth company?

Accepted Answer

A)   The company pays a large dividend.
B)   Earnings are reinvested in the company for future growth.
C)   Sales revenues are not growing.
D)   The company invests most of its money in safe securities like government bonds.
E)   The company provides a predictable source of income for investors.

Question 8

Successful investors evaluate their investments and do not let their investments manage themselves.What are at least two specific factors you can consider to be successful as an investor?

Accepted Answer

The answer of Successful investors evaluate their investments and do...

Question 9

An example of an investment with high risk is a federal government bond.

Accepted Answer

A) True 
 B)False

Question 10

In the event of bankruptcy,stockholders have a claim to assets of the corporation before bondholders.

Accepted Answer

A) True 
 B)False

Question 11

According to some financial experts like Suze Orman,how much of an investment portfolio should a 30-year-old have in safe (nongrowth)investments?

Accepted Answer

A)   20%
B)   30%
C)   70%
D)   80%
E)   100%

Question 12

If overall interest rates in the economy rise,a corporate bond with a fixed interest rate will generally

Accepted Answer

A)   Increase in value.
B)   Decrease in value.
C)   Remain unchanged.
D)   Become worthless.
E)   Be returned to the corporation.

Question 13

To maximize profit or reduce dollar losses when you sell your investments,it is important to do all of the following except

Accepted Answer

A)   Keep purchase records.
B)   Monitor current values to spot opportunities for when to sell.
C)   Identify commissions or fees paid.
D)   Keep a list of sources of information (such as Internet addresses)  for reference.
E)   Identify original dollar costs after you sell investments.

Question 14

The risk associated with some investments may fluctuate because of periods of economic expansion followed by periods of recession.

Accepted Answer

A) True 
 B)False

Question 15

Asset allocation is the process of spreading your assets among several different types of investments to increase risk.

Accepted Answer

A) True 
 B)False

Question 16

The purpose of diversification is to spread your assets among several different types of investments to decrease risk.

Accepted Answer

A) True 
 B)False

Question 17

Which of the following steps should be completed before starting an investment program?

Accepted Answer

A)   Pick out at least two stocks or bonds to invest in.
B)   Work to balance your budget.
C)   Save at least $10,000 to invest.
D)   Invest in certificates of deposit.
E)   These all are completed at the same time.

Question 18

At the most,you should keep only purchase records of the actual dollar cost of your investments.

Accepted Answer

A) True 
 B)False

Question 19

Compare and contrast Treasury securities and municipal securities.

Accepted Answer

The answer of Compare and contrast Treasury securities and municipal...

Question 20

Which of the following would be considered a safe investment?

Accepted Answer

A)   Options
B)   Collectibles
C)   Precious metals
D)   Savings accounts
E)   Commodities

Exam 11: Investing Basics and Evaluating Bonds

Younger investors tend to invest in more growth-oriented investments than older investors.

Investors can typically find more information about stocks and mutual funds online than they can find for bonds.

A corporate bond that is secured by various assets of the issuing firm is called a(n) ____________ bond.

Business failure risk

Rebecca Gladlyn is interested in purchasing an LMN bond that pays 8% interest each year.The interest will be paid semiannually.How often should Rebecca receive interest? What amount should she receive?

A good rule of thumb is to limit installment payments to ____________ of your net (after-tax) income.

Which of the following describes a growth company?

Successful investors evaluate their investments and do not let their investments manage themselves.What are at least two specific factors you can consider to be successful as an investor?

An example of an investment with high risk is a federal government bond.

In the event of bankruptcy,stockholders have a claim to assets of the corporation before bondholders.

According to some financial experts like Suze Orman,how much of an investment portfolio should a 30-year-old have in safe (nongrowth) investments?

If overall interest rates in the economy rise,a corporate bond with a fixed interest rate will generally

To maximize profit or reduce dollar losses when you sell your investments,it is important to do all of the following except

The risk associated with some investments may fluctuate because of periods of economic expansion followed by periods of recession.

Asset allocation is the process of spreading your assets among several different types of investments to increase risk.

The purpose of diversification is to spread your assets among several different types of investments to decrease risk.

Which of the following steps should be completed before starting an investment program?

At the most,you should keep only purchase records of the actual dollar cost of your investments.

Compare and contrast Treasury securities and municipal securities.

Which of the following would be considered a safe investment?