Question 1

An emergency fund should be deposited in a:

Accepted Answer

A)  savings account or other near-cash investments.
B)  six-month certificate of deposit.
C)  checking account.
D)  safe place at home.
E)  safe deposit box in a bank vault.F) C) and E)
G) A) and B)

Question 2

Which of the following types of investment information can be found on the internet?

Accepted Answer

A)  Interest rates for certificates of deposit
B)  Current price information for stocks,bonds,and mutual funds
C)  Broker's buy and sell recommendations
D)  Financial calculators
E)  All of theseF) D) and E)
G) None of the above

Question 3

Which one of the following is a true statement regarding real estate investments?

Accepted Answer

A)  It is not possible for real estate values to decrease.
B)  Location is the least important factor when making a real estate investment.
C)  The growth rate of real estate makes it a long-term investment.
D)  There is no reason to evaluate a real estate investment because real estate always increases in value sooner or later.
E)  The growth rate of real estate makes it a "get-rich-quick" scheme.F) B) and E)
G) A) and C)

Question 4

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 5

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 6

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.F) B) and E)
G) A) and E)

Question 7

If interest rates in the overall economy decrease to 4 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 6 percent?

Accepted Answer

A)  $1,000
B)  $1,500
C)  $2,000
D)  $4,000
E)  $6,000F) All of the above
G) A) and D)

Question 8

The ability of an investment to be converted to cash without a substantial loss in dollar value is called:

Accepted Answer

A)  asset value.
B)  liquidity.
C)  growth potential.
D)  fixed cost factor.
E)  variable cost factor.F) A) and B)
G) B) and D)

Question 9

Which one of the following is not a business periodical?

Accepted Answer

A)  Barron's
B)  Bloomberg Businessweek
C)  New York Stock Exchange Report
D)  Forbes
E)  FortuneF) B) and D)
G) A) and C)

Question 10

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)  emergency fund.
E)  rate of return.F) B) and C)
G) A) and E)

Question 11

A ceiling on a credit card is determined by the borrower and is the dollar amount that they want to borrow using the cash advance provision on their credit card.

Accepted Answer

A) True 
 B)False

Question 12

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

Accepted Answer

A)  War
B)  Inflation
C)  Political activity
D)  Decline in the auto industry
E)  Increasing interest ratesF) B) and D)
G) A) and B)

Question 13

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.F) B) and E)
G) A) and B)

Question 14

Which one of the following is a true statement regarding the components of the risk factor?

Accepted Answer

A)  When choosing an investment,it is not necessary to consider the risk factor.
B)  During inflationary times,there is no risk that the financial return on an investment will not keep pace with the rate of inflation.
C)  The interest rate risk associated with corporate bonds is the result of changes in the interest rates in the economy.
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) B) and E)
G) A) and C)

Question 15

Liquidity is the ability to buy or sell an investment quickly without substantially affecting the investment's value.

Accepted Answer

A) True 
 B)False

Question 16

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.F) A) and D)
G) A) and C)

Question 17

An intermediate-term investment goal is defined as one that will be accomplished within a period of:

Accepted Answer

A)  five to ten years.
B)  two to eight years.
C)  more than five years.
D)  one to five years.
E)  less than one year.F) A) and B)
G) A) and C)

Question 18

Which of the following is not true of stocks?

Accepted Answer

A)  Since the end of World War II,stocks have returned almost 10 percent a year.
B)  Since 1926,stocks had positive gains in 66 years.
C)  Since 1926,stocks lost money in 25 years.
D)  In February 2018,the Dow Jones experienced its worst one-day decline in history.
E)  In reality,stocks do not have a place in every investment portfolio.F) A) and E)
G) B) and E)

Question 19

Choose three 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

Answers will vary.Common stock: average ...

Question 20

Because of the age factor,older investors tend to be more conservative and invest in:

Accepted Answer

A)  speculative stocks.
B)  commodities.
C)  collectibles.
D)  very safe corporate stocks.
E)  options.F) A) and B)
G) A) and C)

Exam 13: Investing Fundamentals

Which one of the following is not a business periodical?

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

Which one of the following is a true statement regarding real estate investments?

Correct AnswerverifiedShow Answer

Because of the age factor,older investors tend to be more conservative and invest in:

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Which of the following types of investment information can be found on the internet?

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

The ability of an investment to be converted to cash without a substantial loss in dollar value is called:

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Which one of the following is a true statement regarding the components of the risk factor?

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

Choose three 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 AnswerverifiedAnswers will vary.Common stock: average ...View AnswerShow Answer

If interest rates in the overall economy decrease to 4 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 6 percent?

Correct AnswerverifiedShow Answer

A ceiling on a credit card is determined by the borrower and is the dollar amount that they want to borrow using the cash advance provision on their credit card.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

An intermediate-term investment goal is defined as one that will be accomplished within a period of:

Correct AnswerverifiedShow Answer

An emergency fund should be deposited in a:

Correct AnswerverifiedShow Answer

Liquidity is the ability to buy or sell an investment quickly without substantially affecting the investment's value.

Correct AnswerverifiedShow Answer

Which one of the following investments offers the greatest liquidity?

Correct AnswerverifiedShow Answer

Which of the following is not true of stocks?

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

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

Correct Answer
verified
Answers will vary.Common stock: average ...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified