Financial Planning Unit 2

1. A marketplace where trading of securities such as equities, bonds, currencies, and derivatives occurs is referred to as a:

• A. call market.

• B. bear market.

• C. financial market.

• D. foreign exchange market.

2. Brian recently got his first part-time job as a food bagger at a local grocery store. He needs a safe place to store his income that allows him to withdraw money easily and frequently. Brian should consider opening which type of account?

• A. savings

• B. checking

• C. health savings

• D. individual retirement

3. Which is an advantage of a money market account over a savings account?

• A. The rate of return on a money market account is significantly better

• B. Money market accounts provide corporate ownership rights.

• C. One can often write checks from a money market account.

• D. Money market accounts are insured by the FDIC

4. Investors take a risk for the potential of receiving a:

• A. bonus.

• B. prize.

• C. promotion.

• D. return.

5. The purpose of the risk pyramid is to show a comparison of:

• A. one stock to another.

• B. one investment to another.

• C. stocks to stock mutual funds.

• D. corporate bonds to municipal bonds.

6. Ownership investments are ideal for investors who are:

• A. risk-averse.

• B. risk-tolerant

• C. close to retirement.

• D. just beginning to invest.

7. Marcus wants to invest a portion of his money in long-term securities to finance his son's college education and his own retirement. To help him make the best investment decisions, Marcus should obtain the services of a:

• A. loan officer.

• B. licensed tax accountant.

• C. certified financial planner.

• D. credit-union representative.

8. Proofing, encoding, capturing, and sorting are all steps in which banking process?

• A. check payment

• B. consumer lending

• C. cash management

• D. commercial lending

9. Chris wants to open a small business, and he has a very good business plan that is likely to succeed. Where would Chris be most likely to go to apply for a loan?

• A. local bank

• B. national bank

• C. insurance provider

• D. mortgage company

10. The direction of a client's cash and securities by a financial services company, usually an investment bank, or an individual is known as

• A. a lockbox

• B. a vendor lease.

• C. private placement.

• D. asset management.