Question 1

A short-term investment goal is one that will be accomplished within a period of:

Accepted Answer

A)  one year or less.
B)  two to five years.
C)  more than five years.
D)  three years or less.
E)  two years or less.

Question 2

What is the primary goal of asset allocation?

Accepted Answer

A)  Investment income
B)  Growth
C)  Liquidity
D)  Return
E)  Risk reduction

Question 3

Which one of the following individuals should have a higher tolerance for risk?

Accepted Answer

A)  Joan Cummings, who is a single mother with two small children
B)  Darren Carter, who works for American Airlines and is worried that he is going to be laid off soon
C)  Barry Parks, who is an investment banker and earns over $200,000 per year
D)  Michael Clark, who is 74 years old and has been retired for 6 years
E)  Fred Funderbunk, who is a pizza delivery person and makes about $15,000 per year

Question 4

An emergency fund should be deposited in a:

Accepted Answer

A)  savings account at the highest available interest rate.
B)  six-month certificate of deposit.
C)  checking account.
D)  safe place at home.
E)  safe deposit box in a bank vault.

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 fund

Question 6

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 estate

Question 7

If you seek financial security,which investments are appropriate for you?

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 financial security.

Question 8

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 bonds

Question 9

Choose four of the six traditional investments and describe how the factors of safety,risk,income,and growth are ranked for evaluating each of these investments.

Accepted Answer

Common stock: average safety,average ris...

Question 10

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 prior to common stockholders.

Question 11

Which of the following does not offer investor services?

Accepted Answer

A)  Standard & Poor's Stock Reports
B)  www.yahoo.com
C)  Morningstar Investment Reports
D)  Mergent
E)  Lipper Reports

Question 12

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 growth

Question 13

A corporation must give each potential investor an annual report.

Accepted Answer

A) True 
 B)False

Question 14

Which of the following is a true statement?

Accepted Answer

A)  A corporation generally obtains equity capital from bondholders.
B)  A corporation must issue either preferred stock or common stock but not both.
C)  When a corporation is experiencing financial problems, an investor should purchase common rather than preferred stock.
D)  Corporations are required to pay dividends every year.
E)  There are no guarantees that a stock's value will go up after a stock split.

Question 15

If you need to withdraw your investment money in two years,you should probably invest in:

Accepted Answer

A)  stocks.
B)  mutual funds.
C)  certificates of deposits.
D)  long-term government bonds.
E)  long-term corporate bonds.

Question 16

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)  Options

Question 17

The U.S.government is the world's largest provider of investment information.

Accepted Answer

A) True 
 B)False

Question 18

Bill Teague has just gotten a gift of $20,000 from his parents and is trying to decide how to invest it.He is thinking about investing in a money market mutual fund because he knows he can withdraw the money whenever he needs it with little chance of a loss in value.What aspect of investing is Bill most concerned about?

Accepted Answer

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

Question 19

Generally,options are conservative,long-term investments.

Accepted Answer

A) True 
 B)False

Question 20

With most investments,more information is available than you can read and comprehend.

Accepted Answer

A) True 
 B)False

Exam 13: Investing Fundamentals

What is the primary goal of asset allocation?

Correct Answer
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Correct Answer
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Generally,options are conservative,long-term investments.

Correct Answer
verified

A corporation selling stock is obligated to:

Correct Answer
verified

The U.S.government is the world's largest provider of investment information.

Correct Answer
verified

Correct Answer
verified

Choose four of the six traditional investments and describe how the factors of safety,risk,income,and growth are ranked for evaluating each of these investments.

Correct Answer
verified
Common stock: average safety,average ris...
View Answer

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

Correct Answer
verified

Which of the following does not offer investor services?

Correct Answer
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A corporation must give each potential investor an annual report.

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

An emergency fund should be deposited in a:

Correct Answer
verified

If you seek financial security,which investments are appropriate for you?

Correct Answer
verified

A short-term investment goal is one that will be accomplished within a period of:

Correct Answer
verified

Which of the following is a true statement?

Correct Answer
verified

Which one of the following individuals should have a higher tolerance for risk?

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

With most investments,more information is available than you can read and comprehend.

Correct Answer
verified

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

Correct Answer
verified

If you need to withdraw your investment money in two years,you should probably invest in:

Correct Answer
verified

Exam 13: Investing Fundamentals

What is the primary goal of asset allocation?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Generally,options are conservative,long-term investments.

Correct AnswerverifiedShow Answer

A corporation selling stock is obligated to:

Correct AnswerverifiedShow Answer

The U.S.government is the world's largest provider of investment information.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Choose four of the six traditional investments and describe how the factors of safety,risk,income,and growth are ranked for evaluating each of these investments.

Correct AnswerverifiedCommon stock: average safety,average ris...View AnswerShow Answer

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

Correct AnswerverifiedShow Answer

Which of the following does not offer investor services?

Correct AnswerverifiedShow Answer

A corporation must give each potential investor an annual report.

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

An emergency fund should be deposited in a:

Correct AnswerverifiedShow Answer

If you seek financial security,which investments are appropriate for you?

Correct AnswerverifiedShow Answer

A short-term investment goal is one that will be accomplished within a period of:

Correct AnswerverifiedShow Answer

Which of the following is a true statement?

Correct AnswerverifiedShow Answer

Which one of the following individuals should have a higher tolerance for risk?

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

With most investments,more information is available than you can read and comprehend.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

If you need to withdraw your investment money in two years,you should probably invest in:

Correct AnswerverifiedShow Answer

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Correct Answer
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Correct Answer
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Common stock: average safety,average ris...
View Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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