Question 1

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 40

Question 2

A $1,000 corporate bond pays 6.5 percent a year.What is the annual interest you will receive?

Accepted Answer

A)  $0.65
B)  $6.50
C)  $65.00
D)  $1,060.50
E)  $1,065.00

Question 3

All of the following statements are considered to be good advice for a potential investor starting an investment program except:

Accepted Answer

A)  Work to balance your budget.
B)  Increase credit purchases to conserve cash.
C)  Establish specific and measurable investment goals.
D)  Start an emergency fund.
E)  Establish a line of credit.

Question 4

Which of the following is not true of mutual funds?

Accepted Answer

A)  Mutual funds range from very conservative to extremely speculative investments.
B)  They do not offer diversification.
C)  They can be used for retirement accounts.
D)  This investment provides professional management.
E)  A mutual fund pools the money from many investors.

Question 5

Twenty years ago,you began investing $2,000 a year.Because your investments earned an average of 8 percent a year,your investment portfolio has a current dollar value of $92,000.How much did you earn on your investments over the 20-year period of time?

Accepted Answer

A)  $2,000
B)  $40,000
C)  $52,000
D)  $92,000
E)  $132,000

Question 6

An investment that an investor expects will increase in value is known as a growth investment.

Accepted Answer

A) True 
 B)False

Question 7

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)  You can trade securities online.
E)  Federal, state, and local governments have a home page where you can obtain investment information.

Question 8

Most large investors find many of the investor services to be too expensive for personal subscriptions.

Accepted Answer

A) True 
 B)False

Question 9

Alice Cooper contributes ten percent of her monthly earnings to her 401k plan at work.The plan allows her to invest in several different types of mutual funds and her employer matches up to 5% of her salary.Which suggestion for obtaining the money she needs for investing is she following?

Accepted Answer

A)  Paying herself 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)  Taking advantage of gifts, inheritance and other windfalls

Question 10

Gina Davidson has received $50,000 in a divorce settlement and is trying to decide how to invest it.She has looked at stocks but is uncertain as some stocks have lost a lot of value for their owners recently.What aspect of investing is she most concerned about?

Accepted Answer

A)  Risk
B)  Inflation
C)  Diversification
D)  Liquidity
E)  Investment growth

Question 11

There is no relationship between risk and safety.

Accepted Answer

A) True 
 B)False

Question 12

Which one of the following is false?

Accepted Answer

A)  Mutual funds include investments in stocks and bonds.
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 for the investor to evaluate a mutual fund.
E)  Mutual fund investments range from very conservative to extremely speculative investments.

Question 13

The advantages of asset allocation include all of the following except:

Accepted Answer

A)  It lessens risk for the investment program.
B)  It helps avoid the pitfall of putting all your eggs in one basket.
C)  It uses different asset classes to provide a measure of safety.
D)  It helps offset a loss in one investment with gains in other investments.
E)  It is viewed as a tool that can reduce the risk associated with short-term investment programs.

Question 14

Allen Arnold earns $3,000 per month.He pays his mortgage,utilities,grocery and other bills and then he makes sure to set aside $150 for his savings and investment accounts before he spends money to go to movies and other personal expenses.Which suggestion for obtaining the money he needs for investing is he following?

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)  Taking advantage of gifts, inheritance and other windfalls

Question 15

If interest rates in the overall economy decrease to 6 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 7 percent? Round to the nearest hundred.

Accepted Answer

A)  $400
B)  $1,200
C)  $900
D)  $1,000
E)  $700

Question 16

Allison Peavy wants to invest but is worried about risk: In particular,she is worried that bad management and increased competition in the wireless phone market will make these companies less profitable than expected.What type of risk is Allison most concerned with?

Accepted Answer

A)  Inflation
B)  Interest rate
C)  Business failure
D)  Systematic
E)  None of these

Question 17

A prospectus discloses information about corporate earnings,assets and liabilities,products or services,and the qualifications of top management.

Accepted Answer

A) True 
 B)False

Question 18

Garrett Jennings is thinking about buying an investment that represents safety and income within the investment pyramid.Which investment is Garrett thinking about purchasing?

Accepted Answer

A)  Speculative stocks, options, and commodities
B)  Growth stocks and rental property
C)  U.S.securities and conservative mutual funds
D)  CDs and U.S.government bonds
E)  All of these are appropriate for safety and income.

Question 19

An investment program can be seen as a pyramid consisting of _____levels?

Accepted Answer

A)  1
B)  2
C)  3
D)  4
E)  5

Question 20

Which one of the following investments offers the least liquidity?

Accepted Answer

A)  Checking account
B)  Government bond
C)  Real estate
D)  Savings account
E)  Certificate of deposit

Exam 13: Investing Fundamentals

Which one of the following is false?

Correct Answer
verified

A prospectus discloses information about corporate earnings,assets and liabilities,products or services,and the qualifications of top management.

Correct Answer
verified

An investment that an investor expects will increase in value is known as a growth investment.

Correct Answer
verified

Alice Cooper contributes ten percent of her monthly earnings to her 401k plan at work.The plan allows her to invest in several different types of mutual funds and her employer matches up to 5% of her salary.Which suggestion for obtaining the money she needs for investing is she following?

Correct Answer
verified

A $1,000 corporate bond pays 6.5 percent a year.What is the annual interest you will receive?

Correct Answer
verified

Which of the following is not true of mutual funds?

Correct Answer
verified

Which one of the following investments offers the least liquidity?

Correct Answer
verified

Gina Davidson has received $50,000 in a divorce settlement and is trying to decide how to invest it.She has looked at stocks but is uncertain as some stocks have lost a lot of value for their owners recently.What aspect of investing is she most concerned about?

Correct Answer
verified

Which one of the following is false?

Correct Answer
verified

The maturity dates for most bonds range between ____________ years.

Correct Answer
verified

There is no relationship between risk and safety.

Correct Answer
verified

Allison Peavy wants to invest but is worried about risk: In particular,she is worried that bad management and increased competition in the wireless phone market will make these companies less profitable than expected.What type of risk is Allison most concerned with?

Correct Answer
verified

If interest rates in the overall economy decrease to 6 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 7 percent? Round to the nearest hundred.

Correct Answer
verified

The advantages of asset allocation include all of the following except:

Correct Answer
verified

Most large investors find many of the investor services to be too expensive for personal subscriptions.

Correct Answer
verified

Correct Answer
verified

An investment program can be seen as a pyramid consisting of _____levels?

Correct Answer
verified

Twenty years ago,you began investing $2,000 a year.Because your investments earned an average of 8 percent a year,your investment portfolio has a current dollar value of $92,000.How much did you earn on your investments over the 20-year period of time?

Correct Answer
verified

Garrett Jennings is thinking about buying an investment that represents safety and income within the investment pyramid.Which investment is Garrett thinking about purchasing?

Correct Answer
verified

All of the following statements are considered to be good advice for a potential investor starting an investment program except:

Correct Answer
verified

Exam 13: Investing Fundamentals

Which one of the following is false?

Correct AnswerverifiedShow Answer

A prospectus discloses information about corporate earnings,assets and liabilities,products or services,and the qualifications of top management.

Correct AnswerverifiedShow Answer

An investment that an investor expects will increase in value is known as a growth investment.

Correct AnswerverifiedShow Answer

Alice Cooper contributes ten percent of her monthly earnings to her 401k plan at work.The plan allows her to invest in several different types of mutual funds and her employer matches up to 5% of her salary.Which suggestion for obtaining the money she needs for investing is she following?

Correct AnswerverifiedShow Answer

A $1,000 corporate bond pays 6.5 percent a year.What is the annual interest you will receive?

Correct AnswerverifiedShow Answer

Which of the following is not true of mutual funds?

Correct AnswerverifiedShow Answer

Which one of the following investments offers the least liquidity?

Correct AnswerverifiedShow Answer

Gina Davidson has received $50,000 in a divorce settlement and is trying to decide how to invest it.She has looked at stocks but is uncertain as some stocks have lost a lot of value for their owners recently.What aspect of investing is she most concerned about?

Correct AnswerverifiedShow Answer

Which one of the following is false?

Correct AnswerverifiedShow Answer

The maturity dates for most bonds range between ____________ years.

Correct AnswerverifiedShow Answer

There is no relationship between risk and safety.

Correct AnswerverifiedShow Answer

Allison Peavy wants to invest but is worried about risk: In particular,she is worried that bad management and increased competition in the wireless phone market will make these companies less profitable than expected.What type of risk is Allison most concerned with?

Correct AnswerverifiedShow Answer

If interest rates in the overall economy decrease to 6 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 7 percent? Round to the nearest hundred.

Correct AnswerverifiedShow Answer

The advantages of asset allocation include all of the following except:

Correct AnswerverifiedShow Answer

Most large investors find many of the investor services to be too expensive for personal subscriptions.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

An investment program can be seen as a pyramid consisting of _____levels?

Correct AnswerverifiedShow Answer

Twenty years ago,you began investing $2,000 a year.Because your investments earned an average of 8 percent a year,your investment portfolio has a current dollar value of $92,000.How much did you earn on your investments over the 20-year period of time?

Correct AnswerverifiedShow Answer

Garrett Jennings is thinking about buying an investment that represents safety and income within the investment pyramid.Which investment is Garrett thinking about purchasing?

Correct AnswerverifiedShow Answer

All of the following statements are considered to be good advice for a potential investor starting an investment program except:

Correct AnswerverifiedShow Answer

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