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S1-2022: BF21 - 2.00 Understand the Basics of Investing Flashcards | StudBud
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S1-2022: BF21 - 2.00 Understand the Basics of Investing
S1-2022: BF21 - 2.00 Understand the Basics of Investing
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1
Which is an advantage of investing in bonds?
They are very low risk.
They offer extremely high rates of return.
They permit people to access their money at any time.
They are insured by the FDIC.
2
What type of investment involves several people pooling their money to purchase stocks & bonds?
secure
mutual funds
elective
money market accounts
3
Which are often considered one of the safest investments?
precious metals
government bonds
commodities
penny stocks
4
In the banking industry,professionals that advise borrowers on credit options & payment methods
bank managers
loan officers
bank tellers
bookkeepers
5
Proofing, encoding, capturing, and sorting are all steps in which banking process?
commercial lending
check payment
consumer lending
cash management
6
Which is an example of a real estate investment?
partial ownership of a corporation
a corporate bond
land to be developed in the future
a certificate of deposit
7
One of the biggest risks to a real estate investment is:
a low rate of return.
lacking FDIC insurance.
the inability to write checks.
depreciation.
8
In the banking industry, a compliance officer is responsible for:
keeping employee records in a secure manner.
making sure that all safety regulations are being enforced.
checking the documentation on customer accounts.
ensuring that all ethical and regulatory standards are met.
9
Investment through items that are worth more than originally sold due to rarity or popularity?
real estate
stocks
stock mutual funds
collectibles
10
Which has a safe place to earn interest on savings, without sizable financial penalties?
a retirement fund
a holding company
a retail bank
the stock market
11
Direction of a client's cash & securities by a financial services company or an individual is:
asset management.
a lockbox.
private placement.
a vendor lease.
12
Which statement most accurately describes the relationship between risk and return?
For high return, an investor usually accepts a high risk.
For a high return, an investor usually accepts a low risk.
For a low return, an investor usually accepts no risk.
For a low return, an investor usually accepts a high risk.
13
Successful bank managers and supervisors typically began their employment as:
programmers.
apprentices.
tellers.
volunteers.
14
The term that refers to how easily an asset can be converted to cash is known as:
currency.
liquidity.
Eurobond.
commodity.
15
To help her make the best long-term investment decisions, clients should obtain the services of a:
certified financial planner.
credit-union representative.
licensed tax accountant.
loan officer.
16
Which is a factor that determines how much investment risk a person can handle?
banking institution
goals
social status
income
17
The least amount of input to achieve the highest amount of output is known as:
liquidity.
market.
efficiency.
commodity.
18
The purpose of the risk pyramid is to show a comparison of:
one investment to another.
stocks to stock mutual funds.
one stock to another.
corporate bonds to municipal bonds.
19
Which statement is true about certificates of deposit (CDs)?
One must pay a penalty for withdrawing money early.
The riskiest investment is a certificate of deposit.
They may depreciate in value.
They are issued by corporations or governments.
20
Which is an example of a lending investment?
antiques
bonds
real estate
stocks
21
Which is a disadvantage of investing in a savings account?
A minimum balance is required to keep the account active.
The rate of return fails to keep up with inflation.
The account's potential for loss is high.
One must pay a penalty for withdrawing money early.
22
The flexibility to borrow different amounts of money at different times w/o having to reapply…
comes from a line of credit
comes from an installment loan
comes from a certificate of deposit
comes from a mortgage
23
Which is an advantage of a money market account over a savings account?
money market account interest rate is significantly better
Money market accounts are insured by the FDIC.
Money market accounts provide corporate ownership rights.
One can often write checks from a money market account.
24
A type of market in which each transaction takes place at predetermined time intervals is a:
call market.
bond market.
financial market.
continuous market.
25
A type of market that allows traders to trade any time the market is open is known as a:
continuous market.
call market.
bond market.
financial market.
26
Which type of financial market sells new stock or bond issues to investors?
hard commodities
soft commodities
primary capital
secondary capital
27
A service for payments to be directed to a post office box instead of directly to the company
asset management.
lockbox.
private placement.
vendor lease.
