Ch 31 Test Review-Investing Application Question Preview (ID: 42687)


Investing. TEACHERS: click here for quick copy question ID numbers.

Which statement is most true?
a) Investing is always unpredictable.
b) Investing presents opportunities for people and businesses to increase their income.
c) Successful investing is a matter of luck.
d) Investing is always very risky.

Using money to participate in a business enterprise that offers the possibility of profit is called
a) saving
b) investing
c) gambling
d) risky

The best example of a mid-term goal might be
a) finish high school
b) finish college
c) save money for a house
d) save money for retirement

How much money is recommended to save for your emergency fund?
a) one month of rent
b) six months of rent
c) one month of expenses
d) six months of expenses

All of the following include securities except
a) stocks
b) bonds
c) mutual funds
d) certificate of deposit, or CD

When corporations or governments need to borrow large amounts of money, they often issue
a) mutual funds
b) stocks
c) bonds
d) certificate of deposits or CDs

The difference between the amount you pay for a bond and its face value is the
a) rate of return
b) bond discount
c) bond variance
d) coupon rate

Because they have low risk, government bonds
a) offer higher interest rates than other bonds
b) off lower interest rates than savings accounts
c) are taxable
d) offer lower interest rates than other bonds

If an investor buys a Treasury bill (or T-bill) through a bank or brokerage firm,
a) the T-bill will be taxable
b) the investor will pay a commission
c) the investor will get a discount
d) the investor will get a tax examption

To finance a child's education, the best option would be to invest in
a) a regular savings account
b) Series I savings bonds
c) Series EE savings bonds
d) collectibles

Municipal bonds are sold to finance
a) city projects
b) regional projects
c) town projects
d) all of the above

When you buy stock, you receive a
a) stock certificate
b) bond
c) stock option
d) tax deduction

SEC stands for
a) Stock and Exchange Commission
b) Stock and Exchange Certificate
c) Securities and Exchange Commission
d) Securities and Exchange Certificate

Common stock
a) is stock that receives cash dividends before other stockholders receive any
b) yields the highest rate of return
c) provides the most basic form of corporation ownership
d) is stock that does not pay dividends

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