Question 1

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

Accepted Answer

A)   savings bonds
B)   GICs
C)   preferred stock
D)   corporate bonds
E)   optionsF) B) and C)
G) A) and B)

Question 2

The maturity dates for most bonds range between ____________ years.

Accepted Answer

A)   0 to 5
B)   5 to 15
C)   10 to 15
D)   1 to 30
E)   1 to 40F) A) and E)
G) C) and E)

Question 3

Which of the following is the most readily available source of information for an investor?

Accepted Answer

A)   the daily newspaper
B)   government publications
C)   corporate reports
D)   investor newsletters
E)   business periodicalsF) A) and B)
G) B) and C)

Question 4

The money obtained from selling corporate bonds

Accepted Answer

A)   is obtained from lenders.
B)   is obtained from the owners of the business.
C)   is obtained from employee stock option programs.
D)   does not have to be repaid.
E)   has been allocated to retirement programs.F) A) and B)
G) B) and D)

Question 5

Anne Marie earns $25,000 a year. Her monthly expenses total $1,200. What is the minimum amount of money that Ms. Lynn should set aside in an emergency fund?

Accepted Answer

A)   $1,200
B)   $1,800
C)   $2,400
D)   $3,600
E)   $12,500F) A) and C)
G) B) and E)

Question 6

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?

Accepted Answer

A)   growth stocks
B)   government bonds
C)   corporate bonds
D)   commodities
E)   a money-market fundF) A) and C)
G) None of the above

Question 7

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

Accepted Answer

A) True 
 B)False

Question 8

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

Accepted Answer

In Chapter 10, the following sources of ...

Question 9

Which of the following investments offers the greatest growth potential?

Accepted Answer

A)   bank accounts
B)   common stock
C)   corporate bonds
D)   government bonds
E)   option bondsF) A) and C)
G) B) and D)

Question 10

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

Accepted Answer

A) True 
 B)False

Question 11

Investing in global may result in investors experiencing ____________ risk.

Accepted Answer

A)   currency exchange rate
B)   interest rate
C)   inflation.
D)   market
E)   incomeF) A) and E)
G) All of the above

Question 12

An investor can make money on a common stock investment by

Accepted Answer

A)   waiting for the corporation to repurchase the stock.
B)   waiting for the stock's value to increase and then selling it.
C)   waiting for the stock's value to decrease and then selling it.
D)   waiting for the stock to reach the maturity date.
E)   converting the common stock to preferred stock.F) B) and E)
G) A) and C)

Question 13

An investment alternative in the form of an annuity that is similar to a mutual fund but that is less risky as it provides a certain degree of insurance to the investor is a (an)  __________

Accepted Answer

A)   segregated fund.
B)   government bond.
C)   guaranteed investment certificate.
D)   government stock.
E)   option fund.F) D) and E)
G) C) and E)

Question 14

A speculative investment is an investment that is made in the hope of earning a relatively large profit over a long period of time.

Accepted Answer

A) True 
 B)False

Question 15

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

Accepted Answer

A) True 
 B)False

Question 16

Which of the following statements is not true?

Accepted Answer

A)   When establishing an investment program, you should begin by establishing your investment goals.
B)   When you are choosing an investment, you should examine the risk factor associated with each investment.
C)   When establishing an investment program, you should examine the potential return offered by different investment alternatives.
D)   Find a professional financial planner and leave the planning to the professional.
E)   Continue to evaluate the investments contained in your investment plan.F) All of the above
G) A) and B)

Question 17

Under current tax laws, capital losses can be

Accepted Answer

A)   simply lost.
B)   used to offset capital gains.
C)   used to reduce your last year's tax amount.
D)   used to offset dividend income.
E)   used to offset interest and rental income.F) C) and D)
G) A) and B)

Question 18

For an investor who wants to speculate, which of the following investments would be appropriate?

Accepted Answer

A)   red-chip stocks
B)   derivatives
C)   utility stocks
D)   corporate bonds
E)   preferred stock issuesF) None of the above
G) A) and D)

Question 19

Which of the following is not a true statement?

Accepted Answer

A)   No one is going to make you save the money you need to start an investment program.
B)   To be useful, investment objectives must be specific and measurable.
C)   Investment goals must be tailored to the particular financial needs of the individual.
D)   Because investment objectives deal with the future, it is useless to plan more than five years in the future.
E)   A long-term investment objective involves a time period of five years or more.F) B) and C)
G) A) and C)

Question 20

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

Accepted Answer

A)   corporate bonds
B)   guaranteed investment certificates
C)   government bonds
D)   gemstones
E)   preferred stockF) C) and E)
G) D) and E)

Exam 10: Fundamentals of Investing

Which of the following is the most readily available source of information for an investor?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

The maturity dates for most bonds range between ____________ years.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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?

Correct AnswerverifiedShow Answer

Which of the following statements is not true?

Correct AnswerverifiedShow Answer

An investor can make money on a common stock investment by

Correct AnswerverifiedShow Answer

Which of the following is not a true statement?

Correct AnswerverifiedShow Answer

An investment alternative in the form of an annuity that is similar to a mutual fund but that is less risky as it provides a certain degree of insurance to the investor is a (an) __________

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

The money obtained from selling corporate bonds

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Anne Marie earns $25,000 a year. Her monthly expenses total $1,200. What is the minimum amount of money that Ms. Lynn should set aside in an emergency fund?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedIn Chapter 10, the following sources of ...View AnswerShow Answer

Under current tax laws, capital losses can be

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

A speculative investment is an investment that is made in the hope of earning a relatively large profit over a long period of time.

Correct AnswerverifiedShow Answer

Which of the following investments offers the greatest growth potential?

Correct AnswerverifiedShow Answer

For an investor who wants to speculate, which of the following investments would be appropriate?

Correct AnswerverifiedShow Answer

Investing in global may result in investors experiencing ____________ risk.

Correct AnswerverifiedShow Answer

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In Chapter 10, the following sources of ...
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