Question 1

Which one of the following is false?

Accepted Answer

A)   You can obtain recommendations to buy or sell stocks and other securities by accessing Internet sites.
B)   There is a wealth of investment information available, but most small investors cannot afford to use it.
C)   You can obtain current price information for stocks, bonds, and mutual funds by using the Internet.
D)   A search engine is a research tool that helps you find the investment information you want.
E)   Both government and businesses provide individuals with investment information.F) A) and B)
G) B) and E)

Question 2

A line of credit is a short-term loan that is approved before the money is actually needed.

Accepted Answer

A) True 
 B)False

Question 3

It is suggested that for young investors, ____ percent of their investment portfolio allocated to large-cap stocks.

Accepted Answer

A)   30
B)   40
C)   50
D)   60
E)   70F) A) and B)
G) A) and E)

Question 4

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

Accepted Answer

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

Question 5

Which one of the following is a true statement?

Accepted Answer

A)   When choosing an investment, it is not necessary to consider the risk factor.
B)   During inflationary times, there is a risk that the financial return on an investment will not keep pace with the rate of inflation.
C)   The interest rate risk associated with investments in bonds is the result of changes in business conditions faced by companies.
D)   The risk of business failure deals with changes in the value of stocks and bonds due to changes in interest rates in the market.
E)   The prices of stocks, bonds, and other investments never fluctuate in the market.F) A) and B)
G) C) and D)

Question 6

All except which one of the following are good ways to acquire money for starting an investment program?

Accepted Answer

A)   Pay bills first, and then save a reasonable amount of money for investment
B)   Participate in an elective savings program offered by your employer
C)   Make a special savings effort one month per year
D)   Borrow money specifically for investment purposes
E)   Take advantage of gifts, inheritances, and windfallsF) A) and B)
G) A) and C)

Question 7

The average investor cannot afford to purchase much of the investment information available from the U.S. government.

Accepted Answer

A) True 
 B)False

Question 8

Which one of the following is false?

Accepted Answer

A)   Most mutual funds invest in stocks, bonds, and other securities.
B)   Diversification provided by a mutual fund reduces risk.
C)   The goals of one mutual fund investor may differ from those of another.
D)   Since mutual fund managers are professionals, there is no need to evaluate a mutual fund.
E)   Mutual fund investments range from very conservative to very speculative investments.F) B) and D)
G) A) and E)

Question 9

Bob McDowell is thinking about buying an investment. The most important consideration when making this investment is the location of the investment. What investment is Bob thinking about purchasing?

Accepted Answer

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

Question 10

The potential return of any investment should be directly related to the risk that the investor assumes.

Accepted Answer

A) True 
 B)False

Question 11

Although useful for many things, the Internet cannot be used to monitor the value of stock, bond, and mutual fund investments.

Accepted Answer

A) True 
 B)False

Question 12

Based on historical performance, which one of the following investments is most apt 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) A) and B)
G) C) and D)

Question 13

The maturity dates for most bonds range between ____________ years.

Accepted Answer

A)   0 to 5
B)   5 to 20
C)   10 to 20
D)   1 to 30
E)   15 to 40F) D) and E)
G) C) and D)

Question 14

A bankruptcy will remain on your credit report for __________ year(s) .

Accepted Answer

A)   2
B)   up to 10
C)   no more than 7
D)   20 or more
E)   2 to 4F) B) and C)
G) A) and E)

Question 15

Many financial planners typically charge hourly consulting fees in the following range:

Accepted Answer

A)   $10 - $30.
B)   $50 - $70.
C)   $75 - $200.
D)   $125 - $250.
E)   $150 - $300.F) A) and C)
G) A) and B)

Question 16

Carl Reimer has just received an inheritance of $40,000 from his mother and is trying to decide how to invest it. Carl is young and earns a good salary. Carl wants to invest in a small cap mutual fund. While he won't receive much in the way of cash dividends, the companies are reinvesting significant amounts so the sales revenue and earnings in the future will be much larger. What aspect of investing is Carl most concerned about?

Accepted Answer

A)   Risk
B)   Return
C)   Diversification
D)   Liquidity
E)   Investment growthF) A) and B)
G) A) and C)

Question 17

Potential investors should not wait until they put their financial affairs in order before starting to invest.

Accepted Answer

A) True 
 B)False

Question 18

The average credit card debt for college students is:

Accepted Answer

A)   $1,400.
B)   $2,200.
C)   $3,500.
D)   $7,000.
E)   $10,000.F) A) and B)
G) C) and D)

Question 19

What is the primary goal of asset allocation?

Accepted Answer

A)   Investment income
B)   Growth
C)   Liquidity
D)   Return
E)   Risk reductionF) C) and D)
G) A) and E)

Question 20

The money obtained by a company from selling corporate bonds:

Accepted Answer

A)   is obtained from lenders.
B)   is obtained from the owners of the business.
C)   is obtained from employee stock option programs.
D)   does not have to be repaid.
E)   must be allocated to retirement programs.F) A) and B)
G) A) and C)

Exam 13: Investing Fundamentals

The potential return of any investment should be directly related to the risk that the investor assumes.

Correct Answer
verified

A bankruptcy will remain on your credit report for __________ year(s) .

Correct Answer
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Which one of the following is a true statement?

Correct Answer
verified

The average investor cannot afford to purchase much of the investment information available from the U.S. government.

Correct Answer
verified

Bob McDowell is thinking about buying an investment. The most important consideration when making this investment is the location of the investment. What investment is Bob thinking about purchasing?

Correct Answer
verified

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

Correct Answer
verified

What is the primary goal of asset allocation?

Correct Answer
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Which one of the following is false?

Correct Answer
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All except which one of the following are good ways to acquire money for starting an investment program?

Correct Answer
verified

Many financial planners typically charge hourly consulting fees in the following range:

Correct Answer
verified

Which one of the following is false?

Correct Answer
verified

Although useful for many things, the Internet cannot be used to monitor the value of stock, bond, and mutual fund investments.

Correct Answer
verified

It is suggested that for young investors, ____ percent of their investment portfolio allocated to large-cap stocks.

Correct Answer
verified

Correct Answer
verified

The money obtained by a company from selling corporate bonds:

Correct Answer
verified

A line of credit is a short-term loan that is approved before the money is actually needed.

Correct Answer
verified

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

Correct Answer
verified

The maturity dates for most bonds range between ____________ years.

Correct Answer
verified

Potential investors should not wait until they put their financial affairs in order before starting to invest.

Correct Answer
verified

The average credit card debt for college students is:

Correct Answer
verified

Exam 13: Investing Fundamentals

The potential return of any investment should be directly related to the risk that the investor assumes.

Correct AnswerverifiedShow Answer

A bankruptcy will remain on your credit report for __________ year(s) .

Correct AnswerverifiedShow Answer

Which one of the following is a true statement?

Correct AnswerverifiedShow Answer

The average investor cannot afford to purchase much of the investment information available from the U.S. government.

Correct AnswerverifiedShow Answer

Bob McDowell is thinking about buying an investment. The most important consideration when making this investment is the location of the investment. What investment is Bob thinking about purchasing?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

What is the primary goal of asset allocation?

Correct AnswerverifiedShow Answer

Which one of the following is false?

Correct AnswerverifiedShow Answer

All except which one of the following are good ways to acquire money for starting an investment program?

Correct AnswerverifiedShow Answer

Many financial planners typically charge hourly consulting fees in the following range:

Correct AnswerverifiedShow Answer

Which one of the following is false?

Correct AnswerverifiedShow Answer

Although useful for many things, the Internet cannot be used to monitor the value of stock, bond, and mutual fund investments.

Correct AnswerverifiedShow Answer

It is suggested that for young investors, ____ percent of their investment portfolio allocated to large-cap stocks.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The money obtained by a company from selling corporate bonds:

Correct AnswerverifiedShow Answer

A line of credit is a short-term loan that is approved before the money is actually needed.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

The maturity dates for most bonds range between ____________ years.

Correct AnswerverifiedShow Answer

Potential investors should not wait until they put their financial affairs in order before starting to invest.

Correct AnswerverifiedShow Answer

The average credit card debt for college students is:

Correct AnswerverifiedShow Answer

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