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Exam 10: Fundamentals of Investing

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Question 1

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When starting an investment program, you should participate in an elective savings program.

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Question 2

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What is step 4 of the steps for effective investment planning?

A) Determine the amount of money you need to obtain your goals.
B) Specify the amount of money you currently have available to fund your investments.
C) List different investments that you want to evaluate.
D) Reduce possible investments to a reasonable number.
E) Choose at least two different investments.

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The fees for investor services and newsletters may range between $30 and $750 a year.

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

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

An intermediate-term objective is defined as one that will be accomplished within eighteen months.

Investing in global may result in investors experiencing ____________ risk.

Which of the following investments would rank the highest with regard to being speculative?

Equity capital is money

Preferred stock represents the most basic form of corporate ownership.

Normally, corporate bondholders receive interest

An emergency fund should be deposited in a

Investments in commodities and options are all of the following except

After the death of her husband, Gina Balmer, 35, received a check for $350,000 from a life insurance company.Ms.Balmer has two small children and wants to make sure that both she and the children are taken care of in the future.Based on this information, which of the investment factors listed below would be the most important to Ms.Balmer in her investment program?

When a bondholder loses money because interest rates in the economy increase, it is an example of ____________ risk.

Today, federal, provincial, and local governments and most corporations have a home page where you can obtain valuable information.

Matt Jacobs is single and 24.He has just graduated from college and obtained a job making $26,400 a year.He would like to establish a long-term investment program.Which of the following investments would you recommend for his investment program?

Once you have painstakingly developed a financial plan, it is not wise to change it.

Jamie Lynn earns $40,000 a year.Her monthly expenses total $1,700.What is the minimum amount of money that Ms.Lynn should set aside in an emergency fund?

Statistical averages show trends and direction, but they do not pinpoint the actual value of a specific investment.