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Exam 10: Fundamentals of Investing

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Question 1

Multiple Choice

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Which of the following investments would rank the highest with regard to being speculative?

A) savings bonds
B) GICs
C) preferred stock
D) corporate bonds
E) options

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Question 2

Multiple Choice

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An emergency fund should be deposited in a

A) savings account at the highest available interest rate.
B) six-month certificate of deposit.
C) checking account.
D) safe place at home.
E) safe deposit box in a bank vault.

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Question 3

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The average investor cannot afford to purchase much of the investment information available from the government.

When starting an investment program, you should participate in an elective savings program.

Investments in commodities and options are all of the following except

After the death of her husband, Gina Balmer, 35, received a check for $350,000 from a life insurance company.Ms.Balmer has two small children and wants to make sure that both she and the children are taken care of in the future.Based on this information, which of the investment factors listed below would be the most important to Ms.Balmer in her investment program?

Once you have painstakingly developed a financial plan, it is not wise to change it.

The fees for investor services and newsletters may range between $30 and $750 a year.

What is step 4 of the steps for effective investment planning?

When a bondholder loses money because interest rates in the economy increase, it is an example of ____________ risk.

Statistical averages show trends and direction, but they do not pinpoint the actual value of a specific investment.

Preferred stock represents the most basic form of corporate ownership.

An intermediate-term objective is defined as one that will be accomplished within eighteen months.

Today, federal, provincial, and local governments and most corporations have a home page where you can obtain valuable information.

Matt Jacobs is single and 24.He has just graduated from college and obtained a job making $26,400 a year.He would like to establish a long-term investment program.Which of the following investments would you recommend for his investment program?

The potential return of any investment should be directly related to the risk that the investor assumes.

Investing in global may result in investors experiencing ____________ risk.

Equity capital is money

Jamie Lynn earns $40,000 a year.Her monthly expenses total $1,700.What is the minimum amount of money that Ms.Lynn should set aside in an emergency fund?

Normally, corporate bondholders receive interest