Finance Quiz #11

Which of the following is not a true statement? Because investment goals deal with the future, it is ineffective to make long-term goals.
Which of the following steps is NOT a factor to be considered before making your first investment? Save at least $10,000 to invest
A ________ is an employer-sponsored retirement account, and participating in one is one of the easiest ways to begin an investment program. 401(k) account
When choosing an investment, you should consider risk. The four primary risk components are Inflation, interest rate, business failure, market.
Which of the following risks reduces your purchasing power? Inflation risk
Which of the following risks deals with fluctuations in the economy from a period of rapid expansion followed by a period of recession? Market risk
Inflation risk deals with A reduction in purchasing power.
Business failure risk can be due to Bad management and/or unsuccessful products.
Market risk is associated with fluctuations in the market due to Economic conditions such as rapid expansion and recession.
Business failure risk Causes the business to be less profitable than originally anticipated.
Timothy Calibe purchased common stock in XYZWidgets.com. To be a successful investor, he should Continue to evaluate his investment in XYZWidgets.com after the purchase.
Which of the following investments is the most liquid? Interest-bearing checking account
The process of spreading your assets among several different types of investments to lessen risk is called Asset allocation.
A fancy way of saying you need to diversify your investments is Don’t put all of your eggs in one basket.
Which of the following investments typically has the largest potential growth? Stocks
Which of the following investments typically has the most risk? Stocks
Which of the following has returned an average of almost 10% per year since 1926? Stocks
Some financial experts, such as Suze Orman, suggest that investors include a percentage of growth investments as part of their investment plan. This percentage can be calculated by subtracting your age from 100.
Which of the following is not a U.S. Treasury security? Treasury stock
A discounted security means that the actual purchase price is Less than the maturity value.
A U.S. government security issued in minimum units of $100 with 4, 13, 26, or 52-week maturities is called a Treasury bill.
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 Treasury note.
A U.S. government security issued in minimum units of $100 with a 30-year maturity is called a Treasury bond.
A security issued by the U.S. government where the principal increases with inflation and decreases with deflation is called a TIPS.
A bond backed by the full faith, credit, and unlimited taxing power of the government that issued it is called a ________ bond. general obligation
A bond that is repaid from the income generated by the project it is designed to finance is called a(n) Revenue bond.
A debt security issued by a state or local government is known as a Municipal bond.
Generally, interest on corporate bonds is normally paid every Six months.
A bond that is backed only by the reputation of the issuing corporation is called a(n) ________ bond. debenture
A corporate bond that is secured by various assets of the issuing firm is called a(n) ________ bond. mortgage
A bond that can be exchanged, at the owner’s option, for a specified number of shares of the corporation’s stock is called a(n) ________ bond. convertible
A fund to which annual or semiannual deposits are made for the purpose of redeeming a bond issue is called a(n) ________ fund. sinking
Bonds of a single issue that mature on different dates are called ________ bonds. serial

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