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Saving/Investing
Test Description: Saving and Investing test review questions
Instructions: Answer all questions to get your test result.
1) A stock ticker symbol is the unique alphabetic name which identifies a stock.
A
True
B
False
2) Most wealthy people have gained their fortunes by winning the lottery or inheriting a large sum of money.
A
True
B
False
3) Bonds are an example of a growth investment.
A
True
B
False
4) Capital gain is unearned income received from the sale of an asset above its purchase price.
A
False
B
True
5) Someone who has a conservative investment philosophy would most likely invest in CDs, MMAs, Options, Futures, and Commodities.
A
True
B
False
6) The time value of money relates directly to time, money, and rate of interest.
A
True
B
False
7) When saving for an emergency, it is important to keep your savings liquid.
A
True
B
False
8) Commodities are a riskier investment than Mutual Funds.
A
True
B
False
9) If an investor can earn 8 percent interest on an investment, approximately how long will it take it to double in value?
A
72 months
B
9 years
C
12 years
D
8 years
10) Which of the following is a feature of a certificate of deposit (CD)?
A
Funds deposited in a CD are very liquid.
B
Funds deposited in a CD are held for a certain length of time.
C
Funds deposited in a CD can be accessed via check or debit card.
D
Funds deposited in a CD have tiered interest rates.
11) Which of the following statements is true in regards to paying taxes on investments?
A
Taxes are always paid on investments either when the money is placed in the investment or removed from the investment.
B
Since investments are considered unearned income, taxes do not have to be paid on earnings.
C
Taxes are often owed on profits generated from investments.
D
Taxes only have to be paid on employer-sponsored investment accounts.
12) The most common relationship between risk and return in investing can be stated as:
A
No relationship exists between risk and return
B
lower risk indicates higher return
C
higher risk indicates lower return
D
higher risk indicates higher return
13) Kyle has a aggressive investment philosophy. Which one of the following types of investments would Kyle most likely invest?
A
index funds
B
commodities
C
stocks
D
CDs
14) Which statement below is true about mutual funds?
A
Mutual funds are convenient and professionally managed.
B
All mutual funds buy stocks.
C
You can choose which stock to include in your mutual funds.
D
Mutual funds offer guaranteed returns.
15) A bond is:
A
A type of investment that is only offered by depository institutions.
B
A type of debt that a company issues to investors for a specified period of time.
C
A type of investment that has the potential for significant fluctuations over a short period of time.
D
A share of ownership in a company.
16) ETF stands for
A
Electronically-Traded Funds. ETFs are mutual funds that are traded on the NYSE.
B
Exchange-Traded Funds. ETFs are index funds that are traded like stocks.
C
Employee-Traded Funds. ETFs are mutual funds that you receive from your employer to save for retirement.
D
Equity-Traded Funds. ETFs are index funds that are traded like stocks.
17) All are examples of the different types of returns from investments EXCEPT
A
capital gains
B
interest
C
rents
D
principles
18) Which one of the follow is not an example of investing?
A
buying rental property
B
buying a car to get to work
C
buying a tow truck with a blade to start a towing and snow removal service
D
buying a business to open an ice cream shop
19) When buying a stock, you are better off investing all of your money at once instead of investing your money in intervals over a period of time.
A
False
B
True
20) To calculate simple interest, use the formula I = P x R x T.
A
False
B
True
*select an answer for all questions
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