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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
False
B
True
2) Most wealthy people have gained their fortunes by winning the lottery or inheriting a large sum of money.
A
False
B
True
3) Bonds are an example of a growth investment.
A
False
B
True
4) Capital gain is unearned income received from the sale of an asset above its purchase price.
A
True
B
False
5) Someone who has a conservative investment philosophy would most likely invest in CDs, MMAs, Options, Futures, and Commodities.
A
False
B
True
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
False
B
True
8) Commodities are a riskier investment than Mutual Funds.
A
False
B
True
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
12 years
C
8 years
D
9 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 can be accessed via check or debit card.
C
Funds deposited in a CD have tiered interest rates.
D
Funds deposited in a CD are held for a certain length of time.
11) Which of the following statements is true in regards to paying taxes on investments?
A
Taxes only have to be paid on employer-sponsored investment accounts.
B
Taxes are often owed on profits generated from investments.
C
Since investments are considered unearned income, taxes do not have to be paid on earnings.
D
Taxes are always paid on investments either when the money is placed in the investment or removed from the investment.
12) The most common relationship between risk and return in investing can be stated as:
A
No relationship exists between risk and return
B
higher risk indicates lower return
C
lower risk indicates higher 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
CDs
B
index funds
C
commodities
D
stocks
14) Which statement below is true about mutual funds?
A
You can choose which stock to include in your mutual funds.
B
Mutual funds offer guaranteed returns.
C
Mutual funds are convenient and professionally managed.
D
All mutual funds buy stocks.
15) A bond is:
A
A type of investment that has the potential for significant fluctuations over a short period of time.
B
A type of investment that is only offered by depository institutions.
C
A share of ownership in a company.
D
A type of debt that a company issues to investors for a specified period of time.
16) ETF stands for
A
Equity-Traded Funds. ETFs are index funds that are traded like stocks.
B
Employee-Traded Funds. ETFs are mutual funds that you receive from your employer to save for retirement.
C
Electronically-Traded Funds. ETFs are mutual funds that are traded on the NYSE.
D
Exchange-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
interest
B
rents
C
capital gains
D
principles
18) Which one of the follow is not an example of investing?
A
buying a tow truck with a blade to start a towing and snow removal service
B
buying a car to get to work
C
buying rental property
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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