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POB 4.03
Test Description: POB 4.03
Instructions: Answer all questions to get your test result.
1) Mary needs a savings plan that will allow her to access her money as cash for potential emergency needs. Which type of evaluation factor of saving is she considering?
A
Potential return
B
Safety and risk
C
Taxes
D
Liquidity
2) Bob sells specialty guitars and hopes to exchange the guitars for a much higher value than the purchase price. Which type of investment could the guitars become?
A
Commodity exchanges
B
Gold, silver, and precious metals
C
Commodities and futures
D
Collectibles
3) How are common and preferred stock different?
A
Common stockholders have non-voting rights
B
Preferred stock stockholders have priority in dividend payments.
C
Common stock pays stockholders limited dividend payments.
D
Preferred stock stockholders have a minimum period of ownership
4) How are common and preferred stocks similar?
A
Both have a risk of loss of a investment
B
Both pay limited dividend payments
C
Both stockholders have voting rights.
D
Both have the same amount of risk.
5) RadioShack offers shares of stock to investors at a consistent rate of 6% without any voting rights. What type of stock is it offering?
A
Bond
B
Mutual fund
C
Preferred stock
D
Common stock
6) How much interest is earned on a balance of $1,000 for a certificate of deposit that is compounded at an 8% interest rate for account maintained for three years?
A
$135.00
B
$301.89
C
$241.30
D
$259.71
7) How much interest is earned on a balance of $1,800 that is compounded semiannually at a 6% interest rate for account maintained for one year?
A
$154
B
$109.62
C
$110
D
$175
8) Sam prefers a savings plan that allows him to earn interest on previously earned interest. Which type interest does he prefer?
A
Simple
B
Variable
C
Compound
D
Money market
9) Ted deposits money in a savings plan regularly. The interest he earns on this plan is indicative of how the money markets are doing. Which savings plan is he using?
A
Certificate of deposit
B
Bond investment
C
Money market account
D
Savings account
10) Mary prefers a relatively safe investment that will allow her to withdraw money after a few days without losing any of her principal. Which is the BEST investment choice for Mary?
A
Certificate of deposit
B
Money market account
C
Bond investment
D
Stock investment
*select an answer for all questions
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