Question 1

It is suggested that you allocate a percentage of your assets to growth investments based on the:

Accepted Answer

A)  difference between your age and 100.
B)  difference between your age and 75.
C)  difference between your age and 70.
D)  difference between your age and 65.
E)  difference between your age and 62.F) A) and E)
G) B) and C)

Question 2

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

Accepted Answer

A) True 
 B)False

Question 3

Which one of the following statements is true regarding global investments?

Accepted Answer

A)  Global investments must be evaluated just like domestic investments.
B)  Global investments can only be bought in the U.S.
C)  Today,very few investors are investing in stocks and bonds issued by foreign firms or in global mutual funds.
D)  For most small investors,it is safer to invest in foreign firms,rather than in global mutual funds.
E)  Investing in global investments does not diversify your portfolio.F) C) and D)
G) B) and D)

Question 4

Which one of the following individuals should be receptive to speculative investments with higher risks?

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 with financial training
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 yearF) C) and E)
G) C) and D)

Question 5

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 6

Brenda Lee has received a $12,000 gift from her mother and is trying to decide how to invest it.She thinks she would like to invest it in stocks,because she knows that stocks have been appreciating by about 10% over the last several years.What aspect of investing interests Brenda?

Accepted Answer

A)  Risk
B)  Return
C)  Diversification
D)  Liquidity
E)  IncomeF) A) and C)
G) D) and E)

Question 7

All except which one of the following are good ways to acquire money for starting an investment program?

Accepted Answer

A)  Pay bills first,and then save a reasonable amount of money for investment
B)  Participate in an elective savings program
C)  Make a special savings effort one month per year
D)  Borrow money specifically for investment purposes
E)  Take advantage of an employer-sponsored retirement programF) B) and C)
G) A) and C)

Question 8

Which type of risk affects only a specific company or a specific industry?

Accepted Answer

A)  Interest rate
B)  Systematic
C)  Unsystematic
D)  Economic
E)  InflationF) B) and E)
G) All of the above

Question 9

Establishing a(n) ________ ensures that you will have an amount of money that can be obtained quickly in case of immediate need.

Accepted Answer

A)  traditional IRA
B)  emergency fund
C)  Roth IRA
D)  403b
E)  401kF) B) and C)
G) None of the above

Question 10

Asset allocation is the process of spreading your assets among several different types of investments to lessen risk.

Accepted Answer

A) True 
 B)False

Question 11

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 12

There is no relationship between risk and safety.

Accepted Answer

A) True 
 B)False

Question 13

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 stocksF) B) and E)
G) A) and B)

Question 14

The money obtained by a company from selling corporate bonds:

Accepted Answer

A)  is obtained from investors.
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)  must be allocated to retirement programs.F) D) and E)
G) A) and B)

Question 15

If you can leave your investments alone and let them work for 5 to 10 years or more,then you can invest in:

Accepted Answer

A)  short-term government bonds
B)  stocks and mutual funds
C)  highly rated corporate bonds
D)  certificates of deposit
E)  cashF) A) and D)
G) B) and D)

Exam 13: Investing Fundamentals

It is suggested that you allocate a percentage of your assets to growth investments based on the:

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

Asset allocation is the process of spreading your assets among several different types of investments to lessen risk.

Correct Answer
verified

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

Correct Answer
verified

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

Correct Answer
verified

Which one of the following statements is true regarding global investments?

Correct Answer
verified

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

Correct Answer
verified

Establishing a(n) ________ ensures that you will have an amount of money that can be obtained quickly in case of immediate need.

Correct Answer
verified

The money obtained by a company from selling corporate bonds:

Correct Answer
verified

All except which one of the following are good ways to acquire money for starting an investment program?

Correct Answer
verified

Brenda Lee has received a $12,000 gift from her mother and is trying to decide how to invest it.She thinks she would like to invest it in stocks,because she knows that stocks have been appreciating by about 10% over the last several years.What aspect of investing interests Brenda?

Correct Answer
verified

Which type of risk affects only a specific company or a specific industry?

Correct Answer
verified

There is no relationship between risk and safety.

Correct Answer
verified

If you can leave your investments alone and let them work for 5 to 10 years or more,then you can invest in:

Correct Answer
verified

Which one of the following individuals should be receptive to speculative investments with higher risks?

Correct Answer
verified

Exam 13: Investing Fundamentals

It is suggested that you allocate a percentage of your assets to growth investments based on the:

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

Asset allocation is the process of spreading your assets among several different types of investments to lessen risk.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Which one of the following statements is true regarding global investments?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Establishing a(n) ________ ensures that you will have an amount of money that can be obtained quickly in case of immediate need.

Correct AnswerverifiedShow Answer

The money obtained by a company from selling corporate bonds:

Correct AnswerverifiedShow Answer

All except which one of the following are good ways to acquire money for starting an investment program?

Correct AnswerverifiedShow Answer

Brenda Lee has received a $12,000 gift from her mother and is trying to decide how to invest it.She thinks she would like to invest it in stocks,because she knows that stocks have been appreciating by about 10% over the last several years.What aspect of investing interests Brenda?

Correct AnswerverifiedShow Answer

Which type of risk affects only a specific company or a specific industry?

Correct AnswerverifiedShow Answer

There is no relationship between risk and safety.

Correct AnswerverifiedShow Answer

If you can leave your investments alone and let them work for 5 to 10 years or more,then you can invest in:

Correct AnswerverifiedShow Answer

Which one of the following individuals should be receptive to speculative investments with higher risks?

Correct AnswerverifiedShow Answer

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