Consumer Finance 11

T/F Bonds represent an ownership position in a corporation. FALSE
T/F A typical bond will pay annual coupon payments until it matures, at which time it will surrender its par value to the owner of the bond. TRUE
Which of the following Investors will potentially receive dividends on their investments? Share holders
Suppose that you purchased a machine several years ago for your company. You recently sold the machine for more than you paid. This is an example of a ________. capital gain
Investing in Bonds is generally less risky than in stocks. True
Hern MacTavish prefers lending investments. While talking to an investment advisor he found one or two to his liking. Select it (them) from the list. savings accounts and bonds
T/F The nominal rate of interest that investors demand will increase with an increase in the expected rate of inflation. TRUE
One should keep in mind that when it comes to taxes, ________ is (are) better than ________. capital gains; income
Lawrence Wright is slow in math. He has before him the equation of (ending value less beginning value) plus income return, both divided by beginning value. He will find the rate of return
T/F Diversification eliminates all the risk from your portfolio. FALSE
T/F Systemic risk can be effectively managed through diversification. FALSE
Many people never consider or think of the sources of risk that affect their investments. Which one of the following is not a risk associated with investments? Fraudulent risks
What are the benefits of a well diversified portfolio (2) It prevents you from default and business risk
T/F Some types of investments expose you to multiple sources of risk. TRUE
T/F The more time you have available until you need you money, the less risk you should be exposed to. FALSE
T/F Liquidity risk is a very import part of the time dimension of investing. TRUE
T/F You have been saving for a down payment on a new house at the end of this year. Liquidity and market risk should not be a concern for you at this time. FALSE
T/F Most bullish investors beat the markets on a consistent basis. FALSE

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