Ch. 11 Test Review

The use of long-term savings to earn a financial reward is called.

• investing
• gambling
• speculating
• diversifying

According to the Rule of 72, if an investment of $5000 is yielding an average of 6%, it will take________years for that investment to be worth $10,000.

• 6
• 12
• 36
• 72

Which of the following is typically the first stage of investing?

• speculation
• systematic investing
• a put and take account
• strategic investing

Maximization of return in the next five to ten years is the goal of which investment strategy?

• strategic investing
• initial investing
• speculation
• systematic investing

This type of risk is caused by the business cycle. 

• interest-rate risk
• political risk
• market risk
• industry risk

All of the following are wise investment practices except

• seek good investment advice
• keep good financial records
• define your financial goals
• make your decisions quickly to take advantage of the market

A daily newspaper that provides detailed coverage of the business and financial world is

• Barron's
• The Wall Street Journal
• Kiplinger's Personal Finance
• The Economist

Professional investment planners who are trained to give investment advice based on your goals, age, lifestyle, and other factors are called

• certified financial planners
• certified public accountants
• day traders
• discount brokers

Which of the following would be considered the lowest risk investment?

• a stock
• real estate
• an annuity
• a corporate bond

The right, but not the obligation, to buy or sell a commodity or stock for a specified price within a specified time period is called a(n)

• discount bond
• annuity 
• option
• future