Question 1

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. 
-An investment offering a high current income would likely be more desirable for [a young couple | a retired couple].

Accepted Answer

A retired couple would likely prefer an investment offering high current income to support their living expenses, as they may not have other sources of income.

Question 2

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. 
-[Common stocks | Bonds] have no maturity date.

Accepted Answer

The answer of INSTRUCTIONS: Choose the word or phrase in...

Question 3

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. 
-[Depositing a lump sum and letting it grow | Making monthly deposits to your investment] would be the least costly way to reach a financial goal.

Accepted Answer

Depositing a lump sum and letting it grow would be the least costly way to reach a financial goal because it allows for compound interest to work over a longer period of time. Making monthly deposits may result in additional fees and may not have as much time to accumulate interest.

Question 4

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. 
-A fixed dividend would be received with [common | preferred] stock.

Accepted Answer

The answer of INSTRUCTIONS: Choose the word or phrase in...

Question 5

In addition to a description of any investments owned,the worksheet listing your investments should include

Accepted Answer

All of the options listed (purchase price, original amount of investment, current annual income, and latest market value) are important pieces of information to include when listing your investments. The purchase price and original amount of investment can provide insight into how well the investment has performed over time, while the current annual income and latest market value give a sense of the investment's current financial status.

Question 6

The single most important reason for investing is for

Accepted Answer

While all of the options listed are important financial goals, investing is most commonly associated with funding one's retirement. Investing helps individuals save and grow their money over time, providing them with a source of income during their later years when they may no longer be working. While the other options may also involve investing, retirement savings is often the most significant and long-term goal that requires regular investing contributions.

Question 7

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. 
-The owner of a bond would expect to receive [steady | variable] annual income.

Accepted Answer

The answer of INSTRUCTIONS: Choose the word or phrase in...

Question 8

Assume that the price of ABC common stock fell from in a short period of time from $105 to $84.Which of the following investors probably made the most money,if all of these transactions occurred prior to the drop in price?

Accepted Answer

Darren shorted 2000 shares of ABC, and since the stock price fell, he would have made a profit from the decrease in price. Shorting more shares (2000) compared to Bert (1000) means Darren likely made the most money.

Question 9

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. 
-Ownership in a corporation would be represented by [stock | bonds].

Accepted Answer

Stock represents ownership in a corporation, while bonds represent a loan to a corporation. Therefore, the correct choice is A) stock.

Question 10

NYSE Euronext is a part of the broker market accounting for what percent of global equities?

Accepted Answer

NYSE Euronext accounts for approximately 40% of global equities, making it one of the largest stock exchanges in the world.

Question 11

An unmarried investor with few responsibilities should be able to accept ____ better than two people who are married with young children.

Accepted Answer

Risk refers to the potential loss or gain from an investment. An unmarried investor with few responsibilities can generally tolerate higher levels of risk because they have no one else depending on them financially. On the other hand, married couples with young children have more financial obligations and should generally avoid high-risk investments to ensure the financial stability of their family.

Question 12

Which of the following was not an intention of The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010?

Accepted Answer

Recapitalizing banks was not a specific intention of The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010. The act aimed to improve accountability, transparency, and consumer protection, and to discontinue the "too big to fail" approach.

Question 13

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. 
-[Speculating | Investing] is considered to be a long term activity.

Accepted Answer

Investing is typically associated with long-term activities since it involves buying assets with the goal of generating returns over an extended period, whereas speculating typically involves buying assets with the goal of generating short-term profits from price fluctuations.

Question 14

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. 
-[Investing | Speculating] is viewed as a short-term activity that involves the buying and selling of securities in which future value and expected return are highly uncertain.

Accepted Answer

Speculating is the term commonly used to describe a short-term activity involving securities where future values and expected returns are uncertain. Investing, on the other hand, usually refers to a long-term approach to buying and holding securities with the expectation of steady growth and predictable returns.

Question 15

A stock portfolio containing 80% common stocks is most likely to be appropriate for

Accepted Answer

A stock portfolio containing 80% common stocks is often recommended for young investors who are willing to take on a higher level of risk in exchange for potentially higher returns over a long time horizon. As the options given, a young single worker putting money aside for retirement is the best choice for such a portfolio. It may not be suitable for retired couples, divorced middle-aged mothers, and blue-collar, two-income families with five kids, who may require a more balanced and diversified portfolio to match their investment goals and risk tolerance.

Question 16

A long term investment strategy includes all of the following except

Accepted Answer

A long term investment strategy is focused on achieving financial goals over a period of years or decades. It typically involves selecting a mix of investments that balance risk and return, diversifying across asset classes and sectors, and regularly reviewing and adjusting the portfolio. Immediate financial needs to pay current bills are not part of a long term investment strategy, as it is focused on future goals and financial stability.

Question 17

Which of the following terms best describes a day trader

Accepted Answer

A day trader is a type of speculator who buys and sells financial instruments, such as stocks, within the same trading day in order to make quick profits. They do not typically hold onto their positions for the long term, unlike a long-term investor who may hold onto their investments for years. A day trader is also distinct from a money market maker, who facilitates trading in a specific financial instrument and helps to ensure that there is sufficient liquidity in the market. The term "buy and hold mentality" refers to a strategy where an investor buys a security and holds onto it for an extended period of time, regardless of short-term fluctuations in the market. Lastly, it is important to note that day trading is a legal activity as long as it is done through a registered broker-dealer and in compliance with applicable laws and regulations.

Question 18

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. 
-Before you start investing,you should plan to have a minimum of [$1,000 | $15,000] available.

Accepted Answer

The statement suggests that you should have a minimum amount available before you start investing, and $1,000 is generally considered a reasonable minimum amount. $15,000 may be more than necessary for some investors starting out.

Question 19

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. 
-The first thing you need to determine in order to reach an investment goal is the [rate of return you can receive | the amount of money you need to set aside periodically].

Accepted Answer

The statement refers to determining the rate of return you can receive on your investment, which is the first step in creating an investment plan. The amount of money you need to set aside periodically is not the first step, but rather a calculation that would come later in the process after determining the rate of return.

Question 20

Portfolio management involves making decisions in order to

Accepted Answer

Portfolio management involves managing an investment portfolio to meet specific investment needs and objectives. This includes strategies such as diversification, asset allocation, and periodic rebalancing to ensure the portfolio is meeting the investor's goals. While buying low and selling high and maximizing risk and return may be factors in portfolio management, they are not the primary objective. Risk must also be managed, rather than simply accepted, and owning stocks in bear markets may not always be the best course of action.

Quiz 11: Investment Planning

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. -An investment offering a high current income would likely be more desirable for [a young couple | a retired couple].

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. -[Common stocks | Bonds] have no maturity date.

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. -[Depositing a lump sum and letting it grow | Making monthly deposits to your investment] would be the least costly way to reach a financial goal.

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. -A fixed dividend would be received with [common | preferred] stock.

In addition to a description of any investments owned,the worksheet listing your investments should include

The single most important reason for investing is for

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. -The owner of a bond would expect to receive [steady | variable] annual income.

Assume that the price of ABC common stock fell from in a short period of time from $105 to $84.Which of the following investors probably made the most money,if all of these transactions occurred prior to the drop in price?

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. -Ownership in a corporation would be represented by [stock | bonds].

NYSE Euronext is a part of the broker market accounting for what percent of global equities?

An unmarried investor with few responsibilities should be able to accept ____ better than two people who are married with young children.

Which of the following was not an intention of The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010?

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. -[Speculating | Investing] is considered to be a long term activity.

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. -[Investing | Speculating] is viewed as a short-term activity that involves the buying and selling of securities in which future value and expected return are highly uncertain.

A stock portfolio containing 80% common stocks is most likely to be appropriate for

A long term investment strategy includes all of the following except

Which of the following terms best describes a day trader

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. -Before you start investing,you should plan to have a minimum of [$1,000 | $15,000] available.

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. -The first thing you need to determine in order to reach an investment goal is the [rate of return you can receive | the amount of money you need to set aside periodically].

Portfolio management involves making decisions in order to