AnswersISP ONLY Economics S5000XXInvesting and Financial Markets

Investing and Financial Markets — Unit test Answers

59 verified answers4 views
21
Free Preview

Which activity is done in Step 2 of comparison shopping?

A
Research a product.
B
Assess the purchase objectively.
C
Compare prices and features.
D
Buy a product.
22
Free Preview

Someone who diversifies investments is more likely to

A
increase both risks and returns.
B
offset their losses with gains.
C
reduce both risks and returns.
D
increase liquidity of investments.
23

Which are common types of bonds that are currently issued? Check all that apply.

A
corporate bonds
B
equity bonds
C
municipal bonds
D
Treasury bills
E
Treasury notes
F
war bonds
24

Which statements apply to a certificate of deposit (CD)? Choose two answers.

A
It is always purchased as a short-term investment.
B
It can be purchased from a banking institution.
C
It is always purchased as a long-term investment.
D
It can be purchased for almost any amount.
E
It is purchased through an individual's employer.
25

[BLANK]

A
net
B
gross
26

What does reconciling an account involve?

A
checking one's financial records against the bank’s
B
making sure a paycheck arrives on time
C
calculating the interest owed on a savings account
D
identifying instances of identity theft
27

What is the purpose of comparison shopping?

A
ensuring you are not buying out of emotion
B
attempting to find the best deal on a product
C
determining whether you truly need a product
D
reading reviews to make sure a product is good
28

Which types of investments are securities?

A
both debt and equity
B
debt only
C
equity only
D
neither debt nor equity
29

This is a table that could be used to maintain a record of account transactions. It is similar to what is found in a checkbook ledger. Some of its column headings are missing. How should these columns be labeled?

Question illustration
A
Balance, Transaction Code, Description
B
Check Number, Description, Balance
C
Transaction Code, Balance, Notes
D
Description, Check Number, Balance
30

What is one benefit of purchasing saving bonds?

A
Saving bonds are purchased from the government and guaranteed to increase in value.
B
Saving bonds are purchased from commercial banks and guaranteed to increase in value.
C
Saving bonds are short term investments backed by the government to protect from loss.
D
Saving bonds are long term investments created to help first time home buyers obtain a mortgage.
31

The pie graph shows sources of income for people ages 65 and over in 2010.

Question illustration
A
largest source of income.
B
smallest source of income.
C
second largest source of income.
D
fourth largest source of income.
32

Capital appreciation refers to

t
the increased value of an asset.
t
the ability to make a profit from owning stock.
t
the distribution of earnings to shareholders.
t
the profitable sale of shares.
33

Which are the most likely uses of capital invested in a business? Check all that apply.

A
paying taxes
B
hiring workers
C
repaying investors
D
producing goods
E
distributing goods
F
buying materials
34

Alex has not been keeping his banking records up to date. On his latest bank statement, he found that he had been charged an overdraft fee for writing a bad check. In addition to his being charged a fee, which of these is another possible consequence of an overdraft?

A
The bank will close the merchant's account.
B
The merchant who received his check will be charged an overdraft fee.
C
The bank will cancel his debit card.
D
The merchant who received his check will expect repayment and a penalty fee.
35

How do bonds generate income for investors?

A
Bonds depreciate in value.
B
Bonds protect investors from bankruptcy.
C
Bonds pay interest to the bank that sold the bond.
D
Bonds pay a specified amount to the investor at maturity.
36

What is the first step in the decision-making process?

A
Take action.
B
Get information.
C
Form a decision.
D
Identify the choices.
37

At what point does buying in bulk stop being a wise spending choice?

A
when the consumer has a lot of space to store bulk items
B
when costs rise too quickly due to demand
C
when bulk items are not on sale anymore
D
when the consumer buys more than is needed
38

What is the purpose of comparison shopping?

A
ensuring you are not buying out of emotion
B
attempting to find the best deal on a product
C
determining whether you truly need a product
D
reading reviews to make sure a product is good
39

Which investment is best for someone who is likely to need cash soon?

A
mutual fund
B
CD
C
401(k)
D
savings account
40

When planning a budget, the biggest consideration should be the

A
the monthly savings amount.
B
the total income available to spend.
C
the total housing or rent payments.
D
the monthly transportation cost.

Did you find these answers helpful?

More from this Course

Quiz
25 verified answers

Unit Test

Quiz
21 verified answers

Unit Test

Quiz
27 verified answers

Unit Test