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

Which one of the following is a true statement?

Accepted Answer

A)  Professional management is an especially important factor for investors purchasing a mutual fund.
B)  The only reason investors purchase mutual funds is the high growth expected.
C)  While mutual funds may experience loss, your original investment is guaranteed.
D)  Mutual funds are all designed to appeal only to conservative investors.
E)  The responsibility for choosing the right mutual fund is based on the professional manager's evaluation.F) A) and B)
G) C) and E)

Question 3

Which one of the following would not be considered a safe investment for a conservative investor?

Accepted Answer

A)  Corporate bonds
B)  Certificates of deposit
C)  Savings accounts
D)  Government bonds
E)  CollectiblesF) A) and E)
G) A) and C) E

Question 4

Younger investors tend to invest a large percentage of their nest egg in growth-oriented investments.

Accepted Answer

A) True 
 B)False

Question 5

The average credit card debt for undergraduate college students is:

Accepted Answer

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

Question 6

Which one of these is not an example of systematic risk?

Accepted Answer

A)  Recession
B)  Inflation
C)  Political upheaval such as war
D)  Decline in the auto industry
E)  Decline in national economyF) B) and E)
G) B) and C)

Question 7

After Christmas is over,Ted Riley works hard to control his expenses in February so that he can make an extra payment into a mutual fund.Which suggestion for obtaining the money 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 windfallsF) A) and D)
G) B) and D)

Question 8

An emergency fund is an amount of money that can be obtained quickly in case of immediate need.

Accepted Answer

A) True 
 B)False

Question 9

List the sources of investment information that investors can use to evaluate a potential investment.

Accepted Answer

In Chapter 13,the following sources of i...

Question 10

Lester McCann wants to invest but is worried about risk.In particular,he is worried that the money he invests today will not buy as much ten years from now.What type of risk concerns Lester?

Accepted Answer

A)  Inflation
B)  Interest rate risk
C)  Business failure
D)  Market
E)  Global investmentF) A) and D)
G) C) and D)

Question 11

Which newspaper is one of the most readily available sources of information for the average investor?

Accepted Answer

A)  The Wall Street Journal
B)  Government publications
C)  Corporate reports
D)  www.google.com
E)  www.yahoo.comF) B) and C)
G) A) and D)

Question 12

Typical asset classes used for diversification include all of the following except:

Accepted Answer

A)  Bonds
B)  Foreign stocks
C)  Credit cards
D)  Small cap stocks
E)  Midcap stockF) D) and E)
G) All of the above

Question 13

Potential investors should not wait until their financial affairs are in good shape before starting an investment program.

Accepted Answer

A) True 
 B)False

Question 14

The amount of time that your investments have to work for you is an important factor when managing your investment portfolio.

Accepted Answer

A) True 
 B)False  True

Question 15

Bondholders normally receive interest payments every _____months.

Accepted Answer

A)  3
B)  6
C)  9
D)  12
E)  24F) B) and E)
G) None of the above

Question 16

The maximum dollar amount that can be borrowed using the cash advance provision on a credit card is called the:

Accepted Answer

A)  ceiling.
B)  finance charge.
C)  interest rate.
D)  line of credit.
E)  rate of return.F) B) and C)
G) A) and E)

Question 17

Chris O'Donnell is thinking about investing in an investment that is high-risk in the hopes of earning a relatively large profit in a short amount of time.Which investment is he most likely considering?

Accepted Answer

A)  U.S.Treasury bill
B)  Certificate of deposit
C)  Low-growth stock
D)  Speculative stock
E)  Low-risk bondF) A) and E)
G) B) and E) D

Question 18

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) B) and D)
G) A) and C)

Question 19

Which one of the following investments offers the greatest liquidity?

Accepted Answer

A)  Checking account
B)  Common stock
C)  Corporate bond
D)  Real estate
E)  CollectiblesF) C) and D)
G) B) and D)

Question 20

A good rule of thumb is to limit consumer credit payments to no more than ____________ percent of your net (after tax) income.

Accepted Answer

A)  20
B)  30
C)  40
D)  50
E)  60F) All of the above
G) D) and E)

Exam 13: Investing Fundamentals

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

Correct AnswerverifiedShow Answer

Which one of the following is a true statement?

Correct AnswerverifiedShow Answer

Which one of the following would not be considered a safe investment for a conservative investor?

Correct AnswerverifiedE

Younger investors tend to invest a large percentage of their nest egg in growth-oriented investments.

Correct AnswerverifiedShow Answer

The average credit card debt for undergraduate college students is:

Correct AnswerverifiedShow Answer

Which one of these is not an example of systematic risk?

Correct AnswerverifiedShow Answer

After Christmas is over,Ted Riley works hard to control his expenses in February so that he can make an extra payment into a mutual fund.Which suggestion for obtaining the money needs for investing is he following?

Correct AnswerverifiedShow Answer

An emergency fund is an amount of money that can be obtained quickly in case of immediate need.

Correct AnswerverifiedShow Answer

List the sources of investment information that investors can use to evaluate a potential investment.

Correct AnswerverifiedIn Chapter 13,the following sources of i...View AnswerShow Answer

Lester McCann wants to invest but is worried about risk.In particular,he is worried that the money he invests today will not buy as much ten years from now.What type of risk concerns Lester?

Correct AnswerverifiedShow Answer

Which newspaper is one of the most readily available sources of information for the average investor?

Correct AnswerverifiedShow Answer

Typical asset classes used for diversification include all of the following except:

Correct AnswerverifiedShow Answer

Potential investors should not wait until their financial affairs are in good shape before starting an investment program.

Correct AnswerverifiedShow Answer

The amount of time that your investments have to work for you is an important factor when managing your investment portfolio.

Correct AnswerverifiedTrue

Bondholders normally receive interest payments every _____months.

Correct AnswerverifiedShow Answer

The maximum dollar amount that can be borrowed using the cash advance provision on a credit card is called the:

Correct AnswerverifiedShow Answer

Chris O'Donnell is thinking about investing in an investment that is high-risk in the hopes of earning a relatively large profit in a short amount of time.Which investment is he most likely considering?

Correct AnswerverifiedD

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

Which one of the following investments offers the greatest liquidity?

Correct AnswerverifiedShow Answer

A good rule of thumb is to limit consumer credit payments to no more than ____________ percent of your net (after tax) income.

Correct AnswerverifiedShow Answer

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E

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In Chapter 13,the following sources of i...
View Answer

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True

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D

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