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Personal Finance Chapter 13

Total questions: 10

Worksheet time: 16mins

Name
Class
Date
1.

Ownership investments generally

a)

Offer a fixed rate of return

b)

Have a set maturity date

c)

Offer a limited return

d)

Produce capital gains

2.

A stock

a)

Represents a share of ownership in a corporation

b)

Represents a debt owed by a business or organization

c)

Is a portfolio

d)

An example of leverage

3.

Financial risk relates to the possibility that the investment

a)

Will fail to pay a return to the investor

b)

Is subject to sharp price changes

c)

Will fall in value

d)

Is illiquid

4.

Selling shares of stock for more than you originally paid is called

a)

Modern portfolio theory

b)

Leverage

c)

Current income

d)

Capital gain

5.

_______ is (are) the portion of a company‘s profits that the firm pays out to its shareholders

a)

Rent

b)

Dividends

c)

Interest

d)

Net income

6.

Marc purchased 100 shares of LXM stock for $25 per share and sold the same stock two years later for $28 per share. He paid commissions of $50 when he bought, and $55 when he sold. No dividends were paid. Mark‘s current income from this investment is ________, and his capital gains were _______

a)

$0 ; $195

b)

$0 ; $300

c)

$195 ; $0

d)

$300 ; $0

7.

Marla purchased 100 shares of JAX stock for $30 per share and sold the same stock one year later for $29 per share. She paid commissions of $50 when she purchased, and $45 when she sold. Dividends of $2 per share were paid during the year. The capital loss on this stock transaction was

a)

$100

b)

$145

c)

$150

d)

$195

8.

Joelle purchased 100 shares of PAC stock for $20 per share and sold this same stock one year later for $25 per share. She paid commissions of $60 when she purchased, and $70 when she sold. Dividends of $2 per share were paid during the year. The total rate of return on this investment was

a)

9.71%

b)

17.96%

c)

28.50%

d)

33.98%

9.

Which of the following investments has the lowest risk?

a)

T-bills (Treasury)

b)

Municipal Bonds

c)

Income Stocks

d)

Real Estate

10.

You can accept ______ risk when investing for long-term goals

a)

Unlimited

b)

More

c)

Less

d)

No