Question 1

Long-term goals should be completed in one to five years.

Accepted Answer

A) True 
 B)False

Question 2

Which of the following statements is false?

Accepted Answer

A)   The federal government sells bonds and securities to obtain financing.
B)   U.S. government Treasury securities carry a reduced risk of default when compared to stocks.
C)   U.S. Treasury securities offer lower income potential than stocks.
D)   Individual investors who purchase U.S. government securities must hold the investments until maturity.
E)   Treasury securities may be purchased through banks or brokers.

Question 3

A U.S.government security issued in $100 units with maturities of more than 1 year but not more than 10 years is called a

Accepted Answer

A)   Subordinated bond.
B)   Treasury bill.
C)   Treasury note.
D)   Treasury bond.
E)   Savings bond.

Question 4

Some financial experts,such as Suze Orman,suggest that investors include a percentage of growth investments as part of their portfolio.This can be calculated by subtracting your age from

Accepted Answer

A)   50.
B)   95.
C)   100.
D)   110.
E)   200.

Question 5

The taxable equivalent yield for a municipal bond will be lower than the tax-exempt yield for that bond.

Accepted Answer

A) True 
 B)False

Question 6

Gwendolyn Francis is interested in buying a bond that pays $70 annually.The current price of the bond is $800.What is her current yield?

Accepted Answer

A)   3.5%
B)   4%
C)   7%
D)   8%
E)   8.75%

Question 7

Which of the following risks associated with preferred stocks or government or corporate bonds is a result of changes in rates in the economy?

Accepted Answer

A)   Inflation
B)   Interest rate
C)   Business failure
D)   Market
E)   Stock

Question 8

To help survive a financial crisis,it is important to establish a larger than usual emergency fund.

Accepted Answer

A) True 
 B)False

Question 9

Investment goals are always oriented to the future.

Accepted Answer

A) True 
 B)False

Question 10

Which of the following investors would mostly prefer conservative investments to speculative investments?

Accepted Answer

A)   A 25-year-old single investor with a job that pays $60,000 per year
B)   An unemployed single parent who just received a $300,000 divorce settlement
C)   A 30-year-old who has a separate trust fund for day-to-day expenses
D)   A dual-career couple in their 30s whose combined income is $95,000
E)   A healthy 45-year-old who plans to work in his secure job for at least 25 more years

Question 11

Which of the following is not correct?

Accepted Answer

A)   The taxable equivalent yield is greater than the tax-exempt yield.
B)   The taxable equivalent yield can be compared to the return on a taxable investment.
C)   An investor can have a capital gain if she sells a municipal bond before maturity.
D)   The taxable equivalent yield is calculated for municipal securities.
E)   The tax-exempt yield is associated primarily with federal government securities.

Question 12

The financially independent firm or individual that acts as the bondholders' representative is the

Accepted Answer

A)   Chairman of the board.
B)   President of the corporation.
C)   Debenture holder.
D)   Indenture holder.
E)   Trustee.

Question 13

If your main focus is to have your investments increase in value,you are most concerned with

Accepted Answer

A)   Income.
B)   Growth.
C)   Liquidity.
D)   Business failure risk.
E)   Market risk.

Question 14

Which of the following would be considered speculative investments?

Accepted Answer

A)   Government bonds
B)   Savings accounts
C)   Certificates of deposit
D)   Certain corporate bonds
E)   Commodities

Question 15

As a person ages,his or her investment choices may change.Why?

Accepted Answer

As people approach retirement,...

Question 16

The text discusses investment income,investment growth,and investment liquidity.Discuss these in terms of investment types and objectives.

Accepted Answer

• Investment income is most often affili...

Question 17

Which of the following statements is correct?

Accepted Answer

A)   For the corporation, interest paid on corporate bonds is not tax-deductible.
B)   Bond financing is seldom used to pay for a corporation's ongoing business activities.
C)   Bonds are a form of debt financing.
D)   Bonds do not have to be repaid at maturity.
E)   Interest payments to bondholders are at the discretion of the corporation.

Question 18

Rebecca Gladlyn is interested in purchasing an XYZ bond that pays 6% interest each year.The interest will be paid semiannually.How often should Rebecca receive interest?
 What amount should she receive?

Accepted Answer

Semiannual payments will be pa...

Question 19

Patrick Guitman wants to protect himself against losses in his investments.To do this,he should evaluate the companies whose stock or bonds he wants to purchase and continue to evaluate his investments after his purchase.

Accepted Answer

A) True 
 B)False

Question 20

Speculative investments include all of the following except

Accepted Answer

A)   Options.
B)   Commodities.
C)   Precious stones.
D)   Savings accounts.
E)   Precious metals.

Exam 11: Investing Basics and Evaluating Bonds

Gwendolyn Francis is interested in buying a bond that pays $70 annually.The current price of the bond is $800.What is her current yield?

Correct AnswerverifiedShow Answer

To help survive a financial crisis,it is important to establish a larger than usual emergency fund.

Correct AnswerverifiedShow Answer

Speculative investments include all of the following except

Correct AnswerverifiedShow Answer

Which of the following risks associated with preferred stocks or government or corporate bonds is a result of changes in rates in the economy?

Correct AnswerverifiedShow Answer

As a person ages,his or her investment choices may change.Why?

Correct AnswerverifiedAs people approach retirement,...View AnswerShow Answer

Which of the following is not correct?

Correct AnswerverifiedShow Answer

Which of the following statements is false?

Correct AnswerverifiedShow Answer

If your main focus is to have your investments increase in value,you are most concerned with

Correct AnswerverifiedShow Answer

Some financial experts,such as Suze Orman,suggest that investors include a percentage of growth investments as part of their portfolio.This can be calculated by subtracting your age from

Correct AnswerverifiedShow Answer

The financially independent firm or individual that acts as the bondholders' representative is the

Correct AnswerverifiedShow Answer

Long-term goals should be completed in one to five years.

Correct AnswerverifiedShow Answer

Investment goals are always oriented to the future.

Correct AnswerverifiedShow Answer

Which of the following investors would mostly prefer conservative investments to speculative investments?

Correct AnswerverifiedShow Answer

Which of the following statements is correct?

Correct AnswerverifiedShow Answer

A U.S.government security issued in $100 units with maturities of more than 1 year but not more than 10 years is called a

Correct AnswerverifiedShow Answer

Patrick Guitman wants to protect himself against losses in his investments.To do this,he should evaluate the companies whose stock or bonds he wants to purchase and continue to evaluate his investments after his purchase.

Correct AnswerverifiedShow Answer

The text discusses investment income,investment growth,and investment liquidity.Discuss these in terms of investment types and objectives.

Correct Answerverified• Investment income is most often affili...View AnswerShow Answer

Which of the following would be considered speculative investments?

Correct AnswerverifiedShow Answer

Rebecca Gladlyn is interested in purchasing an XYZ bond that pays 6% interest each year.The interest will be paid semiannually.How often should Rebecca receive interest? What amount should she receive?

Correct AnswerverifiedSemiannual payments will be pa...View AnswerShow Answer

The taxable equivalent yield for a municipal bond will be lower than the tax-exempt yield for that bond.

Correct AnswerverifiedShow Answer

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As people approach retirement,...
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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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Correct Answer
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Correct Answer
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Correct Answer
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• Investment income is most often affili...
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Correct Answer
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Semiannual payments will be pa...
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Correct Answer
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