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Investments — Test Answers

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1
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Which investment option should an investor choose if they have a medium-term investment horizon and are concerned about high tax implications?

A
real estate investment
B
global equity fund
C
S&P 500 index fund
D
municipal bond fund
2
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Considering the maturity periods and risk levels, which investment option should you choose if you prefer to access your funds sooner and why?

A
Investment B because it has a longer maturity period and low risk
B
Investment B because it offers a higher interest rate
C
Investment A because it has a shorter maturity period and low risk
D
Investment A because it offers higher total returns
3

Question text not available

Answer:

drop

4

What is incorrect about the candlestick for Friday?

A
The open price is plotted too low.
B
The candlestick should be red, but it's shown as green.
C
The close price is plotted too low.
D
The candlestick should have a shorter lower wick.
5

Based on the chart, can we conclude that the drop in Company A's stock price caused the drop in Company B's stock price?

A
No, because correlation does not imply causation, and both companies could have been affected by the same external factor.
B
No, because Company B's stock price is independent of Company A's stock price.
C
Yes, because both companies experienced a similar drop in prices.
D
Yes, because Company A's price started to drop before Company B's price.
6

Which segmented bar graph correctly represents the relative frequency of these goods?

A
Image with description A bar chart titled Basket of Goods. The x-axis is labeled Relative Frequency (percent) from 0 to 100 percent. The blue bar is whole wheat bread, the orange bar is 2 percent milk, the purple bar is fresh vegetables, and the green bar is chicken breast. Whole wheat bread is 0 to 25 percent. 2 percent milk is 25 to 50 percent. Fresh vegetables is 50 to 75 percent. Chicken breast is 75 to 100 percent.
B
Image with description A bar chart titled Basket of Goods. The x-axis is labeled Relative Frequency (percent) from 0 to 100 percent. The blue bar is whole wheat bread, the orange bar is 2 percent milk, the purple bar is fresh vegetables, and the green bar is chicken breast. Whole wheat bread is 0 to 40 percent. 2 percent milk is 40 to 60 percent. Fresh vegetables is 60 to 80 percent. Chicken breast is 80 to 100 percent.
C
Image with description A bar chart titled Basket of Goods. The x-axis is labeled Relative Frequency (percent) from 0 to 100 percent. The blue bar is whole wheat bread, the orange bar is 2 percent milk, the purple bar is fresh vegetables, and the green bar is chicken breast. Whole wheat bread is 0 to 15 percent. 2 percent milk is 15 to 40 percent. Fresh vegetables is 40 to 75 percent. Chicken breast is 75 to 100 percent.
D
Image with description A bar chart titled Basket of Goods. The x-axis is labeled Relative Frequency (percent) from 0 to 100 percent. The blue bar is whole wheat bread, the orange bar is 2 percent milk, the purple bar is fresh vegetables, and the green bar is chicken breast. Whole wheat bread is 0 to 50 percent. 2 percent milk is 50 to 60 percent. Fresh vegetables is 60 to 70 percent. Chicken breast is 70 to 100 percent.
7

What is the CPI for the entire basket in 2024, using 2010 as the base year? Consumer price index formula: CPI=((cost of market basket in current year)/(cost of market basket in base year))⋅100

A
130
B
132
C
120
D
140
8

Place the steps in the correct order to calculate the CPI for the entire basket.

Answer not available
9

Classify the investments as fixed or not fixed.

Answer:

Investment B (10-year Treasury bond),Investment D (5-year certificate of deposit)|Investment A (savings account),Investment C (stock portfolio),Investment E (money market account)

10

A country's labor force is 50 million, and 3 million of those people are unemployed. What is the unemployment rate if another 2 million people lose their jobs?

A
8%
B
10%
C
6%
D
12%
11

Delaney invests $30,000 in a fixed deposit account that pays no interest over 4 years. During this period, inflation averages 4% per year. What will the present value of the $30,000 investment be at the end of the 4 years? Use this formula to calculate the present value while accounting for inflation: present value=(future value)/((1+annual inflation rate)^number of years)

A
30 dollars comma 000 point 0 0
B
25 dollars comma 000 point 0 0
C
$35,095.76
D
$25,644.13
12

Reggie buys a stock for $⁢50 per share and sells it a year later for $⁢75 per share. If he bought 100 shares, what is his return on investment (ROI)? Use the formula ROI=((final value−initial value)/(initial value))×100

A
100 percent
B
25 percent
C
75 percent
D
50 percent
13

An investment fund's returns depend on the performance of a diversified portfolio of stocks and bonds. Is this a fixed investment?

A
Yes, because it offers high returns.
B
No, because the returns are variable and based on market performance.
C
No, because it has a fixed maturity date.
D
Yes, because it includes bonds.
14

Zissy is visiting Italy from South Africa and wants to buy 1 liter of extra virgin olive oil. The oil is sold in 250 ml bottles, and the price is 8 EUR (euros) per bottle. What is the price of olive oil in ZAR (South African rand) per liter? Currency conversion: 1 EUR = 17 ZAR

A
34 ZAR per liter
B
136 ZAR per liter
C
544 ZAR per liter
D
68 ZAR per liter
15

Blake buys 40 shares of a stock priced at $⁢50 per share and makes 5 trades. The brokerage charges a transaction fee of $⁢10 per trade. What is the total transaction fee Blake must pay?

A
50 dollars
B
250 dollars
C
200 dollars
D
100 dollars
16

An American company decides to invest in a technology startup in the eurozone. The investment is made in euros (EUR), and the exchange rate at the time of the investment is 1 USD = 0.90 EUR. Two years later, the company sold its stake in the startup. At that time, the exchange rate had changed to 1 USD = 0.85 EUR. The initial investment was 500,000 USD. How much did the exchange rate fluctuation impact the return on the investment in USD?

A
The company lost 58 comma 823 point 5 3 USD.
B
The company lost 29 comma 411 point 7 6 USD.
C
The company gained 29 comma 411 point 7 6 USD.
D
The company gained 58 comma 823 point 5 3 USD.
17

Company A has 10 million shares at $100 each. Company B has 5 million shares at $200 each. What is the total market capitalization for these companies?

A
$1 billion
B
$3 billion
C
$4 billion
D
$2 billion
18

You are traveling to Europe and need to exchange your Swiss francs (CHF) for euros (EUR). The current exchange rate is 1 CHF = 0.92 EUR, but the currency exchange service charges a 2% transaction fee. How many Swiss francs do you need to exchange to receive 184 euros after the fee is applied?

A
208 point 1 6 CHF
B
204 CHF
C
198 CHF
D
200 CHF
19

What is a significant risk associated with variable investments?

A
fixed interest rates
B
fixed principal amount
C
no guaranteed return of principal
D
guaranteed returns
20

Romeo's portfolio: Portfolio composition: 80% in stocks, 20% in bonds Investor goal: Romeo is aiming for an 8% return on his investments. Expected returns: Stocks: 10% Bonds: 3% What is the expected rate of return for Romeo’s portfolio, and does it meet his goal of 8% ?

A
9 point 0 percent; yes, it exceeds his goal.
B
8 point 0 percent; yes, it meets his goal.
C
8 point 6 percent; yes, it exceeds his goal.
D
0 point 6 percent; no, it does not meet his goal.

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