Personal Finance - Test Review - Chapter 10

A speculative investment is one that might earn a large profit in a short period of time.

• True

• False

Inflation is a general rise in prices that affects everybody.

• True

• False

Retained earnings are profits a company reinvests for expansion or research and development.

• True

• False

Corporate stock is a unit of ownership in a company.

• True

• False

A mutual fund is an investment in which investors pool their money to buy stocks, bonds, and other securities.

• True

• False

Fee-offset planners earn all of their money through the commission they make.

• True

• False

Tax-exempt income is taxed at a later date.

• True

• False

Income from rental properties cannot be taxed.

• True

• False

A prospectus discloses information about a company’s earnings, assets, and liabilities.

• True

• False

A capital loss is the sale of an investment for less than its purchase price.

• True

• False