Chapter 16 Review

With inflation, it takes more money to buy the same goods and services.

• True
• False

Most financial advisers recommend that you keep three to six weeks’ net pay in your put-and-take account.

• True
• False

When you invest in stocks and bonds, you are helping businesses make and sell new products and services.

• True
• False

Your initial investing should be conservative with low risk.

• True
• False

The greater risk you are willing to take, the greater the potential return.

• True
• False

Nonmarket risk is entirely predictable and controllable.

• True
• False

It is illegal to use information in a company’s annual report for investment purposes.

• True
• False

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

• investing
• gambling
• speculating
• diversifying

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

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

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.