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Investing
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Personal finance
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1
Which statement is most correct description of liquidity?
how quickly an asset can be converted to cash
very wet
the amount of money necessary to pay necessities
The amount of savings available
2
Nationally recognized companies with long records of profits are
income stock
speculative stock
growth stock
blue chip stock
3
If you owe bonds you can earn money from
Dividends
All of the above
Rents
Interest
4
the least risky investments are
mutual funds
antiques
bonds
stocks
5
The first time that the
stock
of a private
company
is offered to the public
OPC
INC
ANG
IPO
6
The interest earned on United States Series EE Savings Bonds is
is zero
deducted at the time of the bond's purchase
exempt from state and local taxes
equal to the money paid to purchase it
7
If the DOW is up for an extended period of time the stock market is experiencing
Bear market
Whale market
Lion market
Bull market
8
It is recommended that you should save or invest ______% of your net income
5
10
15
20
9
Will wants to purchase stock. He should contact
a brokerage firm
the DOW
the NYSE
the board of directors
10
Zac is 60 and sold a condo in Boca for $375,000. Where shouldn't he invest his money?
Bonds
Index funds
speculative stock
Mutual funds
11
which is not true about stocks?
stockholder owns part of company
stockholder may pay different price for same stock
a stockholder always receives a profit when stock is sold
may or may not receive a dividend
12
market capitalization of more than $10 billion
large cap
skull cap
small cap
mid cap
13
Before the Kiss Corporation can issue stocks or bonds, it must register the issue with
The Securities and Exchange Commission (SEC)
The World Bank
Board of Directors
The Federal Reserve
14
Which of the following is a feature of a money market account?
Unlimited transactions every month
No minimum balance required
the money must stay in account for a specific period of time
limited amount of checks per month
15
Which of the following is not an example of a U.S. stock market index
S&P 500
Dow Jones Industrial
NASDAQ
NYSE
16
Stock is
pays reasonable interest
a form of lending to a corporation
ownership in the corporation
the least risky type of investment
17
Ann bought an apartment building in 2006 for $200,000 and sold it in 2016 for $350,000
Ann had a capital gain of $150,000
Ann had earned income of $150,000
Ann lost money due to depreciation
the sale is tax free
18
The interest on municipal bonds is
is earned income
exempt from federal taxes and some state income tax
is taxed by municipality that issued it
state tax free but subject to federal income tax
19
Day to day operations of corporations are managed by
Chairman of the Board
Corporate officers
Board of Directors
Shareholders
20
A produce market is to fruit as the NYSE is to
Interest
apples
Securities
gold
21
Is not a characteristic of a savings tool
more liquid
good for emergencies
higher returns
limited risk
22
What is the most money that an investor could lose if they buy 40 shares of XYZ for $10/share
0
$400
$40
$10
23
It is best to have the rate of return on an investment ______ than the rate of inflation
lower in order to minimize risk
higher to maintain purchasing power
lower to minimize taxes
higher to minimize risk
24
Tim wants to make sure his shares of XYZ Corp give him voting rights. Tim should buy
XYZ Corp common stock
XYZ Corp bonds
XYZ Corp preferred stock
XYZ Treasury stock
25
Drug Inc best selling pain reliever causes cancer.Drug's stock will likely
Decrease
Fluctuate
Not be effected
Increase
26
The most common relationship between risk and return is
no relationship
higher the risk lower return
higher risk, higher return
lower risk, higher return
27
What type of bond might a school district issue in order to build a new high school
U.S. Treasury Bond
IPO Bond
Corporate Bond
Municipal Bond
28
Which type of bond is generally considered "risk-free"
U.S. Treasury Bond
IPO Bond
Municipal Bond
Corporate Bond
29
Which of these statements about dividends is true?
Dividends are automatically reinvested into company's stock
By law, all companies must pay their shareholders dividends
the dividend remains constant as long as you own the stock
U can earn dividends even if the value of stock went down
30
You don't own an asset when you invest in
speculative investments
stocks
bonds
mutual funds
31
Which of the following would be considered the most risky portfolio
30% mutual funds, 60% Treasury bonds and 10% stock
70% mutual funds, 10% stock and 20% Treasury bonds
60% stocks, 30% mutual funds, and 10% Treasury bonds
10% savings account, 50% mutual fund and 40% stock
32
Stocks are generally considered less risky investments than bonds
FALSE
TRUE
33
Your risk tolerance for investing should be determined by these two factors:
Your stocks and bonds
your age and when you need to access your $
Your debits and credits
Your education level and ethnicity
34
Investing in a diversified portfolio of stocks guarantees that you won't lose money
FALSE
TRUE
35
In relation other options, how liquid is a savings account?
More liquid than cash
more liquid than a certificate of deposit
less liquid than a mutual fund
more liquid than a checking account
36
If the person chooses to reinvest their dividend, this means that it will go toward buying
a mutual fund
preferred stock in the corporation
more of the same stock
bonds in the corporation
37
Treasury bills(US bonds) are best for investors looking for
capital gains
a higher return
a secure, low risk investment
asset ownership
38
Mutual funds are
a speculative investment
a diversified investment
a form of real estate investment
risky
39
Each of the following is a practical goal for investing except
Retirement
Buying a house
Higher Education
flat screen TV
40
Jill owns 100 shares of ABC Inc, currently selling for $100/share, if the stock splits 2 for 1
Jill will own 1000 shares
Jill will own 200 shares at $50/share
Jill's stock will be worth $20,000
Jill will own 50 shares at $200/share
41
A diversified portfolio is desirable because it
limits investors choices
decreases risk by investing in a variety of investment tools
increases risk/return ratio
sounds cool
42
Which of the following investment choices best reflects a diversified portfolio?
Investing in an S&P 500 index fund
10-20 companies in the technology industry
a mutual fund that invests in 30-40 oil and gas companies
Investing in one large-cap restaurant stock
43
Which investment vehicle represents an ownership interest in a company?
Corporate Bond
Savings account
Stock
U.S. Treasury Bond
44
market capitalization between $300 million and $2 billion
mid cap
large cap
small cap
ball cap
45
Using a brokerage firm, Nick buys 1000 shares of stock at $10 a share on 50% margin. This means
Nick owns 50% of shares
he saved $5000
the brokerage firm shares 50% of the risk
The brokerage firm lent him 50% of the money to buy stock
46
The decision as to whether to pay a dividend or not is made by
Board of Directors
Corporate officers
Shareholders at the annual meeting
SEC
47
A pharmacy is to drugs as the American Stock Exchange is to:
Securities
Stock Brokers
Dividends
Interest
48
Not an equity investment
Stock
Collectibles
Real Estate
Bonds
