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Exam 13: Investment Fundamentals

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Question 71

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A long-term investor can purchase a small number of extra shares in a company in a convenient,systematic,and inexpensive way through dividend reinvestment plans.

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Question 72

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Successful use of dollar-cost averaging requires investor

A) discipline.
B) knowledge.
C) luck.
D) timing.

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Question 73

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Which of the following would not be considered as securities?

Your risk tolerance is your ability to weather changes in the values of your investments.

The investment strategy that requires the percentage of dollars invested in stocks,bonds,and cash to remain fixed over a long period of time is called

People seeking moderate returns should consider investing in

When investing,you want to select a portfolio of investments that will provide the necessary potential total return through current income and capital gains in the proportions that you desire.

If you choose to strive for a very high return by accepting a high level of risk,you could be characterized as a risk seeker.

Which of the following investments has the lowest risk?

Most returns earned are derived from owning the right asset categories rather than specific investments.

Leverage is the speed and ease with which an investment can be converted to cash.

The average length of a bull market is ____ months,whereas the average length of a bear market is ____ months.

Investors who do not want to lose any of the money that they have invested are most interested in

The more efficient a market for investments the easier it is to find bargains.

A risk premium constitutes the difference between the riskier investment's return and the totally safe return on the T-bill.

The last step in the investment planning process is to decide on what actions to take.

Alexis and Maxwell have decided to invest their investment dollars: 40 percent in stocks,30 percent in bonds,and 30 percent in cash equivalents.Over the past year,the market value of their bonds increased while the market value of their stocks declined.Using the asset allocation model,they should now

The largest portion of return on equity investments normally comes from capital gains as opposed to dividend income.

With a(n) ____ investment,the borrower agrees to pay the investor a specific rate of return for use of the principal.

The after-tax return is the net amount remaining after selling the investment and subtracting the