Which best describes a marketable bond?

one that is bought and sold in the open market

one that later becomes a stock at a market

one that comes from a governing body

one that is paid back before maturity

Too much diversification in a financial portfolio can:

dilute the value of big gains on an individual stock.

cause other investors to avoid a particular stock.

keep stock fund managers from doing their jobs.

Which statement is true about assessing the fundamentals of a security?

Even investment experts disagree about the most important ratios to consider in fundamental analysis.

Fundamental analysis results in a reliable prediction of the stock price for the next year.

Fundamental analysis is a complicated procedure that is inappropriate for beginning investors

The only valid approach to fundamental analysis is based on the work of investment guru Warren Buffett.

Which is an appropriate investment objective for a mutual fund with a buy-and-hold approach?

seeking long-term capital appreciation

covering a broad range of industries

investing primarily in a diversified portfolio

investing in stocks with superior growth potential

The most important factor to consider when choosing an investment is:

whether the investment supports financial goals.

the stockholder's ability to influence company decisions

whether the security pays an annual dividend

The price-earnings (PE) ratio measures:

investors' expectations about a company's performance.

stock price compared to shareholders' equity

management's ability to streamline operations

For assessing the value of a stock, which represents an invalid qualitative factor to consider

paying the CEO a reasonable amount

Quantitative measures such as ratios are helpful because they:

show the relationship between numbers on a company's financial statements.

are figured the same way regardless of the source

can be used to compare companies in different industries.

Which is a disadvantage of investing in bonds?

performing well when the economy is poor

On a stock table, net change shows the difference between:

the day's closing price and the previous day's price.

the highest and lowest prices for the day.

the highest and lowest prices for the year.

last year's average price and this year's average price.

Which statement is false about Form 8-K?

Companies are required to file it for the first three quarters of the fiscal year.

Companies are required to file it within 15 days of a significant event.

The form describes changes in company management, products, acquisitions, or legal actions.

The form is important because it alerts investors to events that might affect a company's fundamental value.

Fundamental analysis estimates the value of a stock primarily so investors can tell whether it is:

a short-term or long-term investment

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

intermediate-term time horizon.

Which is a true statement about ticker symbols?

They uniquely identify a company.

They are only given to companies on the New York Stock Exchange

They are made up of the first three letters of a company's name

They identify the kind of stock.

Ratios are calculated by:

dividing one number by another.

multiplying or dividing, depending on the ratio.

adding or subtracting, depending on the ratio.

multiplying one number by another.

When Staci is told to “consider the cost” before selling an investment, she is being advised to:

estimate the effect of commissions and tax costs on her transaction.

review every one of the costs she has incurred thus far

calculate the costs of prior transactions.

negotiate for a better, cost-saving deal.

When assessing a stock by using fundamental analysis, an investor should consider:

qualitative and quantitative factors.

a chart of the price over the last year.

only ratios and other quantitative factors.

recent trends that might affect the short-term price

Return on equity (ROE) measures management's ability to make a profit:

from the money that shareholders have invested.

from the money generated by sales.

by becoming more efficient in operations

by becoming shareholders of smaller firms

Which is the least important variable of a bond fund?

The amount of time you spend researching the bonds in the fund.

at which the money in the fund increases

credibility ratings of the fund

Module 3 Financial Planning

Authored by Andrea Little

Business

12th Grade

Used 18+ times

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55 questions

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MULTIPLE CHOICE QUESTION

1 min • 1 pt

Which item should be placed in the liabilities section on a company balance sheet?

cash

buildings

inventory

employee wages

MULTIPLE CHOICE QUESTION

1 min • 1 pt

Which individual does in-depth work on formulating investment strategies for clients, helping them fulfill their needs, and reaching their financial goals?

financial planner

investment banker

financial consultant

mutual fund manager

MULTIPLE CHOICE QUESTION

1 min • 1 pt

Which person will analyze, interpret, and process a wide variety of transactions, and be aware of their impact to assets on behalf of a beneficiary?

financial planner

investment banker

trust operations specialist

securities operations specialist

MULTIPLE CHOICE QUESTION

1 min • 1 pt

Which is a poor way to find companies in which to invest?

Read reputable investment magazines and newspapers

Discuss investment opportunities with family and friends.

Follow suggestions in unsolicited e-mails and phone calls.

Investigate businesses that have interesting products and services.

MULTIPLE CHOICE QUESTION

1 min • 1 pt

An individual who often works as part of a financial institution and is primarily concerned with raising capital for corporations, governments, or other entities is called a/an:

market consultant.

investment banker.

mutual fund manager.

securities sales agent (broker).

MULTIPLE CHOICE QUESTION

1 min • 1 pt

Which statement is false about using a buy-and-hold strategy?

Assets need only passive management.

Stocks must be carefully monitored.

There are tax benefits for this method.

Price fluctuations can be ignored.

MULTIPLE CHOICE QUESTION

1 min • 1 pt

Which is an important business factor to consider when choosing an investment?

time horizon

risk tolerance

minimization of taxes

comparison to competition

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