Ch 11 Financial Markets Quiz

An agreement to buy or sell at a specific date in the future at a predetermined price is known as what?

• Bond

• Capital market

• Equities

• Futures contract

What are stocks that represent ownership shares in corporations called?

• Bond

• Equities

• Savings

• Risk

What is a situation in which the outcome is not certain, but the probabilities can be estimated?

• Risk

• Savings

• Equities

• Bond

What is the strategy of holding different kinds of investments to minimize risk?

• Financial system

• Portfolio diversification

• Capital market

• Primary market

What is the main difference between Treasury bonds, Treasury notes, and Treasury bills?

• the amount of time for maturity

• the interest rate

• the minimum purchase requirement

• the method of sale

What two investments are at opposite ends of the risk spectrum?

• Treasury notes and futures

• Savings bonds and Treasury notes

• Equities and futures

• CDs and EE savings bonds

Which of the following is an advantage of a 401(k) plan?

• Most employers match a portion of your contributions.

• You never pay taxes on your contributions.

• You may withdraw funds at any time without penalty.

• Your contributions are invested in high-return, high-risk funds.