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