BF21 Unit 2 Practice Test

Which is a disadvantage of investing in a savings account?

• The account's potential for loss is high.

• The rate of return fails to keep up with inflation.

• One must pay a penalty for withdrawing money early.

• A minimum balance is required to keep the account active.

A service that a bank provides to a company for the receipt of customers'

payments, which are directed to a special post office box instead of

directly to the company, is referred to as a/an:

• lockbox.

• vendor lease.

• private placement.

• asset management.

A marketplace where trading of securities such as equities, bonds,

currencies, and derivatives occurs is referred to as a:

• call market.

• bear market.

• financial market.

• foreign exchange market.

A type of market in which each transaction takes place at predetermined

time intervals is referred to as a:

• call market.

• bond market.

• financial market.

• continuous market.

Ownership investments are ideal for investors who are:

• risk-averse.

• risk-tolerant.

• close to retirement.

• just beginning to invest.

Which is a factor that determines how much investment risk a person can

handle?

• goals

• income

• social status

• banking institution

The term that refers to how easily an asset can be converted to cash is

known as:

• commodity.

• currency.

• Eurobond.

• liquidity.

Which is an advantage of investing in bonds?

• They are very low risk.

• They are insured by the FDIC.

• They are insured by the FDIC.

• They permit people to access their money at any time.

In which financial market do people make investments in cocoa beans

and corn?

• money

• insurance

• soft commodities

• selective property

Which is an example of a lending investment?

• bonds

• stocks

• antiques

• real estate