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An explanation of your investment philosophy and your logic on investing to reach specific goals is a(n) ​


A) ​investment portfolio.
B) ​investment plan.
C) ​marketing strategy.
D) ​security.

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Short-term investors are usually more interested in current income than capital gains.

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True

Shares in the ownership of a corporation are called​


A) ​stocks.
B) ​bonds.
C) ​mutual funds.
D) ​a portfolio.

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Which of the following investments has the lowest risk?


A) ​T-bills
B) ​Municipal bonds
C) ​Income stocks
D) ​Real estate

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Dividend reinvestment plans are appropriate for investors who do not currently need dividend income.

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Ownership investments generally


A) ​offer a fixed rate of return.
B) ​have a set maturity date.
C) ​offer a limited return.
D) ​produce capital gains.

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Gary purchased 250 shares of PAC stock for $37 per share and sold this same stock one year later for $44 per share.He paid commissions of $15 when he purchased the stock and $10 when he sold the stock.Dividends of $1.50 per share were paid during the year.The total rate of return on this investment was​


A) ​22.98 percent.
B) ​22.70 percent.
C) ​18.92 percent.
D) ​19.32 percent.

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If your time horizon is zero to five years and your portfolio consists of 35 percent cash,40 percent bonds,and 25 percent stocks,you would be considered to have a(n) ____ investment philosophy.


A) ​conservative
B) ​aggressive
C) ​moderate
D) ​ultraconservative

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Being risk averse means that you focus primarily on preservation of capital with little desire for current income from your investments.

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The more efficient a market for investments the easier it is to find bargains.

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_________ has to do with the speed with which new information is reflected in the market prices for investments.


A) ​Leverage
B) Modern portfolio theory
C) ​Dollar-cost averaging
D) ​Market efficiency

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D

Patricia borrowed $20,000 to make a $50,000 real estate investment.She later sold the real estate making a $4,000 profit.What was Patricia's total return on this investment?


A) ​40 percent
B) ​20 percent
C) ​13 percent
D) ​8 percent

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A long-term investor generally has a high-risk investment philosophy.

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The average length of a bull market is ____ months,whereas the average length of a bear market is ____ months.


A) ​10;25
B) ​25;10
C) ​14;33
D) ​55;9

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____ is (are) the portion of a company's profits that the firm pays out to its shareholders.


A) ​Rent
B) ​Dividends
C) ​Interest
D) ​Net income

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The return on lending investments is limited to what the investor was originally promised.

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Leverage is the speed and ease with which an investment can be converted to cash.

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Which of the following is the most diversified investment portfolio?​


A) ​Equal amounts of stock in IBM,Intel,and Microsoft
B) ​Municipal bonds issued by New York,Houston,and Chicago
C) ​One-year,five-year,and ten-year certificates of deposit
D) ​100 shares of Wal-Mart stock,an IBM bond,and a two-year certificate of deposit

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D

The investment strategy where an investor buys a fixed dollar amount of stocks or mutual funds regularly over a long period of time is called​


A) ​dollar-cost averaging.
B) ​asset allocation.
C) ​portfolio diversification.
D) ​business-cycle timing.

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Which of the following arises when investors decide to copy the observed decisions of other investors or movements in the markets rather than follow their own beliefs and information.


A) ​herd-behavior.
B) ​market timing.
C) ​market seeking.
D) ​passive investing.

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