Investment Concepts

An individual goal in making investments is to continuously accumulate wealth because success is measured by the amount of material things owned.

• TRUE

• FALSE

Investment requires savings or minimizing current consumption to be able to set aside a certain amount periodically.

• TRUE

• FALSE

An individual can prepare for his retirement by making small investments during his productive years.

• TRUE

• FALSE

There are different forms of investments and one's choice depends on his risk tolerance.

• TRUE

• FALSE

One who is not yet familiar with the different investment vehicles would preferably put his money in stocks.

• TRUE

• FALSE

Diversification of investments should always be avoided.

• TRUE

• FALSE

These are nonvoting equity securities but has priority in the share of dividends and liquidation rights.

• Ordinary Shares

• Preferred Shares

• Class A Common Stocks

• Convertible bonds

Obligations that mature in one year or less include the following, EXCEPT:

• Treasury Bils

• Commercial Papers

• Treasury Notes

• Negotiable Certificates of Deposit

What is the similarity between Convertible Preferred Stock and Convertible Bonds?

• Both investments have a characteristics of equity only.

• Both investments are convertible into preferred shares.

• Both investments are convertible into ordinary shares.

• Each investments doesn't have a similarity.

Collecting of copper coins espicially those produced hundred years ago cannot be considered an investment.

• TRUE

• FALSE