Question 1

Once you have developed an investment program,there is no need for continued evaluation of it.

Accepted Answer

A) True 
 B)False

Question 2

Stocks provide average safety while government bonds provide ________ safety.

Accepted Answer

A)  low
B)  medium
C)  high
D)  average
E)  below averageF) None of the above
G) A) and B)

Question 3

Bondholders normally receive interest payments every ________ months.

Accepted Answer

A)  3
B)  6
C)  9
D)  12
E)  24F) A) and C)
G) C) and E)

Question 4

Common stock that an investor expects will increase in value is known as a growth stock.

Accepted Answer

A) True 
 B)False

Question 5

Audrey is thinking about an investment that involves buying a written pledge by a corporation to repay a specified amount of money.It also pays interest every 6 months until it matures.What investment is Audrey thinking about purchasing?

Accepted Answer

A)  Common stock
B)  Preferred stock
C)  Corporate bond
D)  Real estate
E)  Mutual fundF) A) and B)
G) A) and C)

Question 6

Jack Carson earns $40,000 a year.His monthly expenses total $2,500.What is the minimum amount of money that he should set aside in an emergency fund?

Accepted Answer

A)  $2,500
B)  $5,000
C)  $7,500
D)  $10,000
E)  $20,000F) C) and E)
G) A) and E)

Question 7

Which of the following is defined as the increase and decrease in a nation's economic activity?

Accepted Answer

A)  Business cycle
B)  Recession
C)  Monetary policy
D)  Fiscal policy
E)  EconomicsF) C) and D)
G) B) and C)

Question 8

Accurate record keeping can help you spot opportunities to maximize profits or reduce dollar losses when you sell your investments.

Accepted Answer

A) True 
 B)False

Question 9

An investor concerned with a predictable source of income provided by an investment would choose:

Accepted Answer

A)  U) S.government securities.
B)  commodities.
C)  options.
D)  common stocks.
E)  speculative investments.F) C) and E)
G) A) and E)

Question 10

Hugh Jackson is thinking about buying an investment.The investment option that he is thinking about buying is an investment where investors pool their money.One of the key features is that it is managed by professional managers.What investment is Hugh thinking about purchasing?

Accepted Answer

A)  Common stock
B)  Preferred stock
C)  Corporate bond
D)  Real estate
E)  Mutual fundF) C) and E)
G) D) and E)

Question 11

Which one of the following investments would rank the highest with regard to safety?

Accepted Answer

A)  U) S.Government bond
B)  Common stock
C)  Preferred stock
D)  Corporate bond
E)  Real estateF) A) and B)
G) B) and E)

Question 12

If interest rates in the overall economy increase to 8 percent,which one of the following is most likely to be the approximate market value of a $1,000 corporate bond with a fixed interest rate of 4 percent?

Accepted Answer

A)  $0
B)  $400
C)  $500
D)  $1,000
E)  $1,700F) None of the above
G) C) and E)

Question 13

A corporation selling stock is obligated to:

Accepted Answer

A)  guarantee the shareholders' investment.
B)  repay money obtained from the sale of that stock.
C)  repurchase shares of stock at a later date.
D)  pay dividends to the common shareholders.
E)  pay dividends to preferred stockholders before common stockholders.F) B) and C)
G) D) and E)

Question 14

In how many of the years since 1926 have stocks lost money?

Accepted Answer

A)  0
B)  10
C)  25
D)  40
E)  55F) A) and C)
G) All of the above

Question 15

John Hernandez is 24 years old and has saved enough money to fund an adequate emergency fund.In addition,he has saved $5,600 that can be used to fund an investment program.He is single,has no dependents,and would like to retire when he is 60 years old.Which one of the investment factors listed below would be most important for an investor like Mr.Hernandez?

Accepted Answer

A)  Beta
B)  Investment income
C)  Investment growth
D)  Risk
E)  Investment liquidityF) A) and C)
G) A) and B)

Question 16

Sam Waters just received $12,000 from his grandmother's estate.He has thought about buying himself a new Harley with the money but has decided instead to add the money to his mutual fund account.What is he doing to obtain the money for investing?

Accepted Answer

A)  Paying himself first
B)  Taking advantage of employer-sponsored retirement programs
C)  Participating in an elective savings program
D)  Making a special effort once or twice a year to save
E)  Sacrificing some purchases to provide financing for investmentsF) C) and D)
G) C) and E)

Question 17

Many financial planners recommend that you choose a mutual fund with an expense ratio of:

Accepted Answer

A)  1 percent or less
B)  2 percent or less
C)  3 percent or less
D)  4 percent or less
E)  5 percent or lessF) B) and C)
G) A) and B)

Question 18

Which one of the following investments offers the greatest opportunity for growth?

Accepted Answer

A)  Bank accounts
B)  Common stock
C)  Corporate bonds
D)  Government bonds
E)  OptionsF) C) and E)
G) All of the above

Question 19

Based on historical performance,which one of the following investments is most likely to provide an average return of 10 percent a year between now and the year 2025?

Accepted Answer

A)  U) S.Treasury bills
B)  Corporate bonds
C)  Stocks
D)  Options
E)  Zero-coupon bondsF) B) and D)
G) D) and E)

Question 20

Which one of the following is not a recommended step individuals can use to withstand an economic downturn?

Accepted Answer

A)  Establish a smaller than usual emergency fund
B)  Consider converting investments to cash to preserve value
C)  Notify lenders and credit card companies if you are unable to make payments
D)  Reduce spending
E)  Monitor the value of your investment and retirement accountsF) C) and D)
G) B) and E)

Exam 13: Investing Fundamentals

Hugh Jackson is thinking about buying an investment.The investment option that he is thinking about buying is an investment where investors pool their money.One of the key features is that it is managed by professional managers.What investment is Hugh thinking about purchasing?

Correct Answer
verified

Which of the following is defined as the increase and decrease in a nation's economic activity?

Correct Answer
verified

An investor concerned with a predictable source of income provided by an investment would choose:

Correct Answer
verified

Once you have developed an investment program,there is no need for continued evaluation of it.

Correct Answer
verified

Many financial planners recommend that you choose a mutual fund with an expense ratio of:

Correct Answer
verified

Sam Waters just received $12,000 from his grandmother's estate.He has thought about buying himself a new Harley with the money but has decided instead to add the money to his mutual fund account.What is he doing to obtain the money for investing?

Correct Answer
verified

Based on historical performance,which one of the following investments is most likely to provide an average return of 10 percent a year between now and the year 2025?

Correct Answer
verified

Bondholders normally receive interest payments every ________ months.

Correct Answer
verified

Which one of the following is not a recommended step individuals can use to withstand an economic downturn?

Correct Answer
verified

If interest rates in the overall economy increase to 8 percent,which one of the following is most likely to be the approximate market value of a $1,000 corporate bond with a fixed interest rate of 4 percent?

Correct Answer
verified

In how many of the years since 1926 have stocks lost money?

Correct Answer
verified

Which one of the following investments offers the greatest opportunity for growth?

Correct Answer
verified

A corporation selling stock is obligated to:

Correct Answer
verified

Accurate record keeping can help you spot opportunities to maximize profits or reduce dollar losses when you sell your investments.

Correct Answer
verified

Common stock that an investor expects will increase in value is known as a growth stock.

Correct Answer
verified

Stocks provide average safety while government bonds provide ________ safety.

Correct Answer
verified

Audrey is thinking about an investment that involves buying a written pledge by a corporation to repay a specified amount of money.It also pays interest every 6 months until it matures.What investment is Audrey thinking about purchasing?

Correct Answer
verified

Which one of the following investments would rank the highest with regard to safety?

Correct Answer
verified

Correct Answer
verified

Jack Carson earns $40,000 a year.His monthly expenses total $2,500.What is the minimum amount of money that he should set aside in an emergency fund?

Correct Answer
verified

Exam 13: Investing Fundamentals

Hugh Jackson is thinking about buying an investment.The investment option that he is thinking about buying is an investment where investors pool their money.One of the key features is that it is managed by professional managers.What investment is Hugh thinking about purchasing?

Correct AnswerverifiedShow Answer

Which of the following is defined as the increase and decrease in a nation's economic activity?

Correct AnswerverifiedShow Answer

An investor concerned with a predictable source of income provided by an investment would choose:

Correct AnswerverifiedShow Answer

Once you have developed an investment program,there is no need for continued evaluation of it.

Correct AnswerverifiedShow Answer

Many financial planners recommend that you choose a mutual fund with an expense ratio of:

Correct AnswerverifiedShow Answer

Sam Waters just received $12,000 from his grandmother's estate.He has thought about buying himself a new Harley with the money but has decided instead to add the money to his mutual fund account.What is he doing to obtain the money for investing?

Correct AnswerverifiedShow Answer

Based on historical performance,which one of the following investments is most likely to provide an average return of 10 percent a year between now and the year 2025?

Correct AnswerverifiedShow Answer

Bondholders normally receive interest payments every ________ months.

Correct AnswerverifiedShow Answer

Which one of the following is not a recommended step individuals can use to withstand an economic downturn?

Correct AnswerverifiedShow Answer

If interest rates in the overall economy increase to 8 percent,which one of the following is most likely to be the approximate market value of a $1,000 corporate bond with a fixed interest rate of 4 percent?

Correct AnswerverifiedShow Answer

In how many of the years since 1926 have stocks lost money?

Correct AnswerverifiedShow Answer

Which one of the following investments offers the greatest opportunity for growth?

Correct AnswerverifiedShow Answer

A corporation selling stock is obligated to:

Correct AnswerverifiedShow Answer

Accurate record keeping can help you spot opportunities to maximize profits or reduce dollar losses when you sell your investments.

Correct AnswerverifiedShow Answer

Common stock that an investor expects will increase in value is known as a growth stock.

Correct AnswerverifiedShow Answer

Stocks provide average safety while government bonds provide ________ safety.

Correct AnswerverifiedShow Answer

Audrey is thinking about an investment that involves buying a written pledge by a corporation to repay a specified amount of money.It also pays interest every 6 months until it matures.What investment is Audrey thinking about purchasing?

Correct AnswerverifiedShow Answer

Which one of the following investments would rank the highest with regard to safety?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Jack Carson earns $40,000 a year.His monthly expenses total $2,500.What is the minimum amount of money that he should set aside in an emergency fund?

Correct AnswerverifiedShow Answer

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