FP Unit 3 3.02 Test

Front

Which statement is false about using a buy-and-hold strategy?
Assets need only passive management,
There are tax benefits for this method,
Stocks must be carefully monitored,
Price fluctuations can be ignored

Back

Stocks must be carefully monitored

Front

Which is an important business factor to consider when choosing an investment? Options: Time horizon, Risk tolerance, Minimization of taxes, Comparison to competition

Back

Comparison to competition

Front

Quantitative measures such as ratios are helpful because they:

Back

Show the relationship between numbers on a companys financial statements.

Front

This strategy is called:

Back

Dollar cost averaging

Front

Which is essential for making wise investment decisions? Age, Intelligence, Knowledge, Wealth

Back

Knowledge

Front

Before investing, a buyer should: Conduct thorough research, Be at least 25 years old, Graduate from college, Own a car

Back

Conduct thorough research

Front

What common ratio did Sammy calculate when he divided the net income by the number of outstanding shares of common stock?

Back

Earnings per share

Front

Which is least likely to be a valid reason for making a significant change in a personal asset allocation? Options: Marriage, Birth of a child, New car purchase, Large shift in inflation

Back

New car purchase

Front

When investing to reach a goal within three years, one invests toward a/an:

Back

short-term time horizon

Front

Fundamental analysis estimates the value of a stock primarily so investors can tell whether it is: A short-term or Long -term investment, Competitive or noncompetitive, Undervalued or overvalued, Run by effective managers

Back

Undervalued or overvalued