Personal Finance

An Investment that an investor expects will increase in value is known as a growth investment. True
Twenty year ago you began investing $2,000 a year. Because your investments earned an average 8% a year, your investment portfolio had a current dollar value of $92,000. How much did you earn on your investment over the 20-year period of time? $52,000 – 92,000 – (20 X 2,000) = 52,000
If interest rates in the overall economy decrease to 6%, which one of the following is most likely to be the market value of a $1,000 corporate bond wight a fixed interest rate of 7%? $1,100
If the interest rates in the overall economy increases to 8%, which of one of the following is most likely to be the market value of a $1,000 corporate bond with a fixed interest rate of 7%? $900
A decrease in the value of stocks, bonds, or other investments may because investors to experience ____ risk. Market
Matt Jackson is single and 24. He has just graduated from college and obtained a job marking $26,400 a year. Which on of the following investments would you recommend for his long-term investment program? Growth Stocks
Which one of the following investments offers the least liquidity? Real Estate
……….”What is aspect of investing is is Terry most conceded about?” Diversification
Which one of the following investments would rank the highest with regard to safety? Government Bond
Audrey is thinking about an investment that involves buying a written pledge by a corporation to repay a specified amount of money. It also pays interest every 6 months until if matures. What investment is Audrey thinking about purchasing? Corporate Bond
Which one of these investments pools funds of many investors and hires a professional money manger to mange those funds? Mutual Fund
Hugh Jackman is thinking about buying an investment. The investment option that he is thinking about buying is an investment where investors pool their money. One of the key features is that it is managed by professional managers. What investment is Hugh thinking about purchasing? Mutual Fund
Which one of the following is false? Since mutual fund mangers are professional, there is no need to evaluate mutual funds.
Which one of the following investments would provide the most predictable source of income? Government bond
Because of the age factor, younger investors tend to invest a lat percentage of their nest egg in what types of investments? Growth-oriented mutual funds
Establishing a(n) ______ ensures that you will have an amount of money that can be obtained quickly in case of immediate need. Emergency fund
Chapter 14 Questions
Jeff Gold Blum has just purchased a security which has has no maturity date and no promised payments. He can recoup his investment by either selling the security to another individual or to the issuer, if the issuer ever makes an offer to buy it. What type of security did Jeff purchase? Common Stock
Lindsey Holt owns stock in the Galloway Gem Company. She knows she will receive a $1.50 dividend each quarter. Given this, you know for sure that she purchased which type of stock? Preferred Stock
Pasty Banz Owns 220 shares of a stock. For the last calendar quarter, the company paid a dividend of $0.47 a share. What is the total amount she received in her dividend check for this quarter? $103.40 – 220 X .47 = 103.4
Which of type of preferred stock can be exchanged for common stock at the stockholders option? Convertible
A very safe investment that generally attracts investors is called a(n) ____ stock. Blue chip
The federal government that a corporation setting a new issue of securities most disclose information about the company and fiancee is a(n): Prospectus
Barker Creek Clothing has after-tax income of $12.8 million. It also has 32 million shares of stocks outstanding. What is the firms earning per share? $0.40 – 12.8/32 = .40
Last year, High-Tech Electronics earned $1.05 per share. If the current market value for a share of stock is $45, what is the firms P-E ratio? $30.00
To calculate dividend yield, the annual dividend amount per share is divided by the _____. Current stock price
Assume that you purchase 100 shares of a stock for $55 a share, that you received an annual dividend of $2.00 a share and that you sold your stock for $65 a share at the end of one year. What is the total return on your investment? $1,200
Acme Widget Inc. has 100 shareholders who own a total of one million shares of its common stock. The company earned $10 million after taxes and paid out 4 million in dividends. The firm has a assets of $125 million and liabilities of $25 million. What is the book value per share? $100
Quing Martin Manufacturing stock has a market value of $48 a share. If the book value is $40 a share, the firm market-to-book ratio is: 1.2
A market in which an investor purchases financial securities from the issuer of those securities is called the _____ market. Primary
A request that a stock be bought or sold at a specified price is called a ______ order. Limit
The Beta of the S&P 500 is: 1
When a corporation sells stock to the general public for the “first time” it is referred to as a(n): Initial public offering
Beta is measure that compares the volatility associated with a specific stock issue wight he volatility of which stock index? S&P index
Chapter 15 Questions
A corporate bond is a corporations written pledge that it will repay a specified amount of money with interest. True
A convertible bond is a bond that can be exchanged, at the owners option, for a specified number of shares of the corporations common stock True
Assume that you purchase a $1,000 corporate bond that pays 9.25% interest. What is the amount of interest that you receive each year? $92.50
Which one of the following statements is correct? Bonds are a form of debt capital
A bond that can be exchanged, at the owners options, for a specified number of shares of the corporations stock is called a(n) ____ bond. Convertible
A call feature: Allows the corporation to buy outstanding bonds from current bondholders before the maturity date
If overall interest in the economy rise, a corporate bond with a fixed interest rate will generally: Decrease in value
If overall interest rates in the economy fall, a corporate bond with a fixed interest rate will generally: Increase in value
Dave Johnson’s objective was to purchase a government bond that provided some protection against inflation and higher prices. To fulfill this objective, John purchased a: TIPS
Generally U.S. government securities issue by the Treasury Department: are not graded because they are risk free for practical purposes
What is the current yield for a $1,000 corporate bond that pays 7% and has a current market value of $800. 8.75%
David Harris purchased a single bond last year for $987. He knows he will receive $1,000 on March 1, 2026. This date is refereed to as the _____ date. Maturity
Tom McCallister buys a bond that the company can retire before maturity if they wish. What type of bond has Tom purchased? Callable bond
Doug Emery purchased a bond that can be exchanged for a set number of shares of the issuer’s common stock, What type of bond has Doug purchased? Convertible
Which of the following reasons explains why investors purchase bonds? Investors purchase bonds for all of these reasons
Which of the following terms applies to a bond issue for which the issuer puts money aside at regular intervals for the purpose of redeeming the bonds? Sinking fund
The major reason why investors purchase mutual funds are professional management and diversification. True
For a load fund, the average commission usually ranges between 3 to 5% of the purchase price. True
A no-foad fund is a mutual fund in which no sales charge is paid by the individuals investor to buy or sell shares. True
A contingent deferred sales load is a 1 to 5% charge that shareholders pay when they withdraw their investment form a mutual fund. True
High-yeild bond funds are sometimes refereed to as junk bond funds. True
The value of a mutual fund’s portfolio minus the mutual funds liabilities, divided by the number of shares outstanding is called the: Net asset value
For most mutual funds, the net asset value is calculated: Daily
A mutual fund in which investors pay a commission every time they purchase shares is called a(n) ____ fund. Load
Mary Cooper just purchased 100 shares in the All-American fund. The purchase cost for each share was $20. If this fund charges 5% load. What is the total amount of commission she will pay the investment company? $100
A mutual fund in which no sales charge is paid by the individual investor is called a(n) ____ fund. No-Load
When Pete Mills went to withdraw $5,00 from the Nationwide Fidelity Mutual fund, he was informed that the fund would charge 5% of the amount withdrawn. What is the dollar amount of the withdrawn charge? $250
A mutual fund that invests in common sticks and bond with the primary objective of conserving capital, providing income, and long-term growth is called a(n) _____ fund. Balanced
A mutual fund that invests in common stocks of rapidly growing corporations with higher-then-average revenue and earnings growth is called a(n) ____ fund. Growth
A mutual fund that only invest in companies outside the United States is called a(n) _____ fund. International
An investment company sponsoring a mutual fund must give potential investors a(n): Prospectus
Tisha Elmwood is buying a charades in a mutual fund that avoids companies that do harm to people, animals, and the environment. What type of mutual fund is this? Socially responsible fund
Chapter 17 Questions
In a direct real estate investment, the investor hold legal title to the property. True
With an indirect real estate investment, the investors appoint a trustee to hold legal tittle on behalf of all the investors in the group. True
Indirect real estate investments include investing in real estate syndicates, REITs, and participation certificates. True
Real estate investments trusts are government-owned real estate companies. False
Real estate investment trusts must distribute at least 90% of their net annual eating to shareholders. Ture
A REIT is simular to a mutual fund or an investment company, and it trades on stock. True
Direct real estate investment include single-family dwellings, duplexes, apartments, land, and commercial property. True
Commercial property refers to land and buildings that produce lease or rental income. True
If you are a limited partner, you are liable for losses beyond your initial investment. False
Real estate investments are classified as: Direct or indirect
An example of a direct real setae investment is a: Real estate dwelling
The prices of single-family houses: Tend to rise overtime, thereby acting as a hedge agaisnt inflation
Which type of REIT pools money to invest in new shopping malls for the sole purpose of collecting rent? Equity
Federal law requires REITs to: Distribute at least 90% of their earnings to shareholders
An example of an indirect real estate investment is: a real estate interment trust (REIT)
REITs, Ginnie Maes, and Freddie Macs are examples of ____ real estate. indirect
Stuart Michelson has invested in several pieces of real estate. Which one of the properties that Stuart owns would be considered commercial real estate. Four-plex that he rents to college students
Jefferson Davis has invested in something that acts like a mutual fund and that invest in properties all over the country. He knows there are federal laws that require this type of interment to distribute at least 90% of the income to shareholders and that requires there be at least 100 shareholders. What type of investment has Jefferson made? REITs

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