Question 1

Eric Patterson earns $80,000 a year.His monthly expenses total $4,500.What is the minimum amount of money that he should set aside in an emergency fund?

Accepted Answer

A)  $2,150
B)  $4,500
C)  $9,000
D)  $13,500
E)  $40,000F) A) and B)
G) A) and D)

Question 2

Both fiscal policy and monetary policy are used on a regular basis to stabilize the economy and encourage economic growth.

Accepted Answer

A) True 
 B)False

Question 3

Alice Cooper contributes six percent of her monthly earnings to her 401k plan at work.The plan allows her to invest in several different types of mutual funds and her employer matches up to 3% of her salary.Which suggestion for obtaining the money she needs for investing is she following?

Accepted Answer

A)  Paying herself first
B)  Taking advantage of employer-sponsored retirement programs
C)  Participating in an elective savings program
D)  Making a special effort once or twice a year to save
E)  Taking advantage of gifts,inheritance and other windfallsF) B) and C)
G) B) and E)

Question 4

To avoid the financial problems associated with excessive credit card debt,you should:

Accepted Answer

A)  Pay your credit card balance in full each month
B)  Use your credit card to pay for small purchases
C)  Take advantage of the cash advance feature
D)  Use a large number of credit cards
E)  Avoid getting help if you think you are in troubleF) None of the above
G) A) and E)

Question 5

Generally,options are conservative,long-term investments.

Accepted Answer

A) True 
 B)False

Question 6

Bill Teague has just gotten a gift of $15,000 from his parents and is trying to decide how to invest it.He is thinking about investing in a money market mutual fund,because he knows he can withdraw the money whenever he needs it with little chance of a loss in value.What aspect of investing is Bill most concerned about?

Accepted Answer

A)  Risk
B)  Return
C)  Diversification
D)  Liquidity
E)  Investment growthF) A) and D)
G) A) and C) D

Question 7

When a bond decreases in value because interest rates in the economy increase,it is an example of ________ risk.

Accepted Answer

A)  market
B)  interest rate
C)  inflation
D)  business failure
E)  currentF) A) and C)
G) A) and B)

Question 8

Mergent and Value Line are companies that would be examples of:

Accepted Answer

A)  stockbrokers.
B)  securities exchanges.
C)  stock regulations.
D)  investor services.
E)  stock underwriters.F) A) and C)
G) A) and B)

Question 9

A good rule of thumb is to limit consumer credit payments to no more than ________ percent of your net (after tax) income.

Accepted Answer

A)  20
B)  30
C)  40
D)  50
E)  60F) A) and B)
G) B) and E)

Question 10

In the beginning of 2018,the average balance on credit cards for U.S.families was about how much?

Accepted Answer

A)  $6,354
B)  $7,500
C)  $10,000
D)  $15,400
E)  $18,000F) D) and E)
G) B) and D)

Question 11

A corporation must give each potential investor an annual report.

Accepted Answer

A) True 
 B)False

Question 12

Bob and Mary Martin are both 32 years old.Although they graduated from college almost 10 years ago,they have never developed a diversified investment program.What extra money they had was invested in high-tech stocks that did quite well until the last five years.Then,with the economic downturn,they encountered major losses.How could asset allocation have reduced the dollar amounts of the Martins' losses?

Accepted Answer

Answers will vary.Asset allocation is th...

Question 13

Twenty years ago,you began investing $200 a month.Because your investments earned an average of 8 percent a year,your investment portfolio has a current dollar value of $128,000.How much did you earn on your investments over the 20-year period of time?

Accepted Answer

A)  $48,000
B)  $60,000
C)  $80,000
D)  $100,000
E)  $128,000F) B) and E)
G) C) and D) C

Question 14

James Gray has a mutual fund that automatically takes $50 out of his paycheck each month.Which suggestion for obtaining the money he needs for investing is he following?

Accepted Answer

A)  Taking advantage of gifts,inheritance and other windfalls
B)  Taking advantage of employer-sponsored retirement programs
C)  Participating in an elective savings program
D)  Making a special effort once or twice a year to save
E)  Using financial leverage to increase investment returnsF) A) and B)
G) None of the above

Question 15

If you need to withdraw your investment money in two years,you should probably invest in:

Accepted Answer

A)  stocks.
B)  mutual funds.
C)  certificates of deposits.
D)  long-term government bonds.
E)  long-term corporate bonds.F) A) and E)
G) A) and D)

Question 16

If you do not pay for products or services purchased on credit,then all of the following can occur,except:

Accepted Answer

A)  Merchandise can be repossessed.
B)  You can develop a good relationship with creditors.
C)  A business can sue to recover the cost of the product or service.
D)  Your credit score can be lowered to reflect late or missed payments.
E)  The cost of additional credit may be higher.F) C) and E)
G) B) and E)

Question 17

For an investor who wants to be conservative,which of the following investments would not be appropriate?

Accepted Answer

A)  U) S.government bonds
B)  Coins and stamps
C)  U) S.securities
D)  CDs
E)  Conservative mutual fundsF) A) and D)
G) B) and C)

Question 18

Which one of the following is false regarding sources of investment information?

Accepted Answer

A)  You can obtain recommendations to buy or sell stocks and other securities by accessing internet sites.
B)  Personal subscriptions to investor services are relatively inexpensive.
C)  You can obtain current price information for stocks,bonds,and mutual funds by using the internet.
D)  You can trade securities online.
E)  Federal,state,and local governments have a home page where you can obtain investment information.F) B) and D)
G) B) and C) B

Question 19

Lester McCann wants to invest but is worried about risk.In particular,he is worried that the money he invests today will not buy as much ten years from now.What type of risk concerns Lester?

Accepted Answer

A)  Inflation risk
B)  Interest rate risk
C)  Business failure
D)  Market risk
E)  Global investmentF) A) and E)
G) A) and D)

Question 20

An investment program can be seen as a pyramid consisting of ________ levels.

Accepted Answer

A)  1
B)  2
C)  3
D)  4
E)  5F) D) and E)
G) C) and D)

Exam 13: Investing Fundamentals

Eric Patterson earns $80,000 a year.His monthly expenses total $4,500.What is the minimum amount of money that he should set aside in an emergency fund?

Correct Answer
verified

Both fiscal policy and monetary policy are used on a regular basis to stabilize the economy and encourage economic growth.

Correct Answer
verified

Alice Cooper contributes six percent of her monthly earnings to her 401k plan at work.The plan allows her to invest in several different types of mutual funds and her employer matches up to 3% of her salary.Which suggestion for obtaining the money she needs for investing is she following?

Correct Answer
verified

To avoid the financial problems associated with excessive credit card debt,you should:

Correct Answer
verified

Generally,options are conservative,long-term investments.

Correct Answer
verified

Correct Answer
verified
D

When a bond decreases in value because interest rates in the economy increase,it is an example of ________ risk.

Correct Answer
verified

Mergent and Value Line are companies that would be examples of:

Correct Answer
verified

A good rule of thumb is to limit consumer credit payments to no more than ________ percent of your net (after tax) income.

Correct Answer
verified

In the beginning of 2018,the average balance on credit cards for U.S.families was about how much?

Correct Answer
verified

A corporation must give each potential investor an annual report.

Correct Answer
verified

Correct Answer
verified
Answers will vary.Asset allocation is th...
View Answer

Twenty years ago,you began investing $200 a month.Because your investments earned an average of 8 percent a year,your investment portfolio has a current dollar value of $128,000.How much did you earn on your investments over the 20-year period of time?

Correct Answer
verified
C

James Gray has a mutual fund that automatically takes $50 out of his paycheck each month.Which suggestion for obtaining the money he needs for investing is he following?

Correct Answer
verified

If you need to withdraw your investment money in two years,you should probably invest in:

Correct Answer
verified

If you do not pay for products or services purchased on credit,then all of the following can occur,except:

Correct Answer
verified

For an investor who wants to be conservative,which of the following investments would not be appropriate?

Correct Answer
verified

Which one of the following is false regarding sources of investment information?

Correct Answer
verified
B

Lester McCann wants to invest but is worried about risk.In particular,he is worried that the money he invests today will not buy as much ten years from now.What type of risk concerns Lester?

Correct Answer
verified

An investment program can be seen as a pyramid consisting of ________ levels.

Correct Answer
verified

Exam 13: Investing Fundamentals

Eric Patterson earns $80,000 a year.His monthly expenses total $4,500.What is the minimum amount of money that he should set aside in an emergency fund?

Correct AnswerverifiedShow Answer

Both fiscal policy and monetary policy are used on a regular basis to stabilize the economy and encourage economic growth.

Correct AnswerverifiedShow Answer

Alice Cooper contributes six percent of her monthly earnings to her 401k plan at work.The plan allows her to invest in several different types of mutual funds and her employer matches up to 3% of her salary.Which suggestion for obtaining the money she needs for investing is she following?

Correct AnswerverifiedShow Answer

To avoid the financial problems associated with excessive credit card debt,you should:

Correct AnswerverifiedShow Answer

Generally,options are conservative,long-term investments.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedD

When a bond decreases in value because interest rates in the economy increase,it is an example of ________ risk.

Correct AnswerverifiedShow Answer

Mergent and Value Line are companies that would be examples of:

Correct AnswerverifiedShow Answer

A good rule of thumb is to limit consumer credit payments to no more than ________ percent of your net (after tax) income.

Correct AnswerverifiedShow Answer

In the beginning of 2018,the average balance on credit cards for U.S.families was about how much?

Correct AnswerverifiedShow Answer

A corporation must give each potential investor an annual report.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedAnswers will vary.Asset allocation is th...View AnswerShow Answer

Twenty years ago,you began investing $200 a month.Because your investments earned an average of 8 percent a year,your investment portfolio has a current dollar value of $128,000.How much did you earn on your investments over the 20-year period of time?

Correct AnswerverifiedC

James Gray has a mutual fund that automatically takes $50 out of his paycheck each month.Which suggestion for obtaining the money he needs for investing is he following?

Correct AnswerverifiedShow Answer

If you need to withdraw your investment money in two years,you should probably invest in:

Correct AnswerverifiedShow Answer

If you do not pay for products or services purchased on credit,then all of the following can occur,except:

Correct AnswerverifiedShow Answer

For an investor who wants to be conservative,which of the following investments would not be appropriate?

Correct AnswerverifiedShow Answer

Which one of the following is false regarding sources of investment information?

Correct AnswerverifiedB

Lester McCann wants to invest but is worried about risk.In particular,he is worried that the money he invests today will not buy as much ten years from now.What type of risk concerns Lester?

Correct AnswerverifiedShow Answer

An investment program can be seen as a pyramid consisting of ________ levels.

Correct AnswerverifiedShow Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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D

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
verified
Answers will vary.Asset allocation is th...
View Answer

Correct Answer
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C

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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B

Correct Answer
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Correct Answer
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