AnswersISP ONLY Economics S5000XXInvesting and Financial Markets

Investing and Financial Markets — Unit test Answers

59 verified answers4 views
41
Free Preview

Which questions should someone ask when deciding whether to lease or buy a car? Check all that apply.

A
Will I use it more than the allowed lease mileage?
B
Will my family like the car?
C
How long do I want the car?
D
How much do I want to spend?
E
How much do I like the car’s options?
42
Free Preview

Capital appreciation refers to

A
the increased value of an asset.
B
the ability to make a profit from owning stock.
C
the distribution of earnings to shareholders.
D
the profitable sale of shares.
43

What is the best reason for Jacinta to have a savings account in addition to a checking account?

A
A savings account accepts all direct deposits and processes all direct withdraws.
B
A savings account ensures she will never go into debt.
C
A savings account guards her money against inflation.
D
A savings account keeps her money safe and separate from her spending money.
44

[BLANK]

A
net
B
gross
45

Which statement best describes stocks?

A
They should be purchased when prices are high and sold when prices are low.
B
They are an investment in a company’s progress and profits.
C
They are a type of investment that includes raw materials and natural resources.
D
They should be purchased only as long-term investments.
46

What is the best reason for Jacinta to have a savings account in addition to a checking account?

A
A savings account accepts all direct deposits and processes all direct withdraws.
B
A savings account ensures she will never go into debt.
C
A savings account guards her money against inflation.
D
A savings account keeps her money safe and separate from her spending money.
47

Which is an example of a high-risk investment?

A
stock in a start-up company
B
bond
C
CDs from an insured bank
D
401(k)
48

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

A
Take action.
B
Get information.
C
Form a decision.
D
Identify the choices.
49

The image shows Alex’s investments in one year. Investments during One Year

Question illustration
A
He should have invested in a commodity instead of a stock.
B
He would have lost more with a higher-risk investment.
C
He most likely would have benefited by diversifying.
D
He most likely would have profited by buying more of the stock.
50

The point at which it is no longer advantageous to buy in bulk is known as marginal

A
cost.
B
tipping.
C
benefit.
D
error.
51

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.
52

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.
53

Which best describes what generally occurs in financial markets?

A
Debt and loans are traded.
B
Assets are traded.
C
Commodities are traded.
D
Shares are traded.
54

Which statement best describes how an investor makes money off debt?

A
An investor makes money by issuing bonds.
A
An investor makes money by earning interest.
A
An investor makes money by raising capital.
A
An investor makes money by being repaid for the principal.
55

Which is true about investments and risk?

A
Low-risk investments have a high return over the long run.
B
High-risk investments usually fail.
C
Safe investments are always somewhat profitable.
D
Every investment carries some degree of risk.
56

Simon bought a computer and made monthly payments. By the end of the month, Simon had no money left for groceries.Which step in the decision-making process should Simon now take?

A
Taking action.
B
Making a decision.
C
Evaluating results.
D
Gathering information.
57

Which statement best describes how an investor makes money off debt?

A
An investor makes money by issuing bonds.
B
An investor makes money by earning interest.
C
An investor makes money by raising capital.
D
An investor makes money by being repaid for the principal.
58

How is a savings account most useful?

A
for saving for a long time without withdrawing
B
for depositing and withdrawing money frequently
C
for using money for CDs and other investments
D
for using money in the near future but not right away
59

Which is the most important consideration when deciding to purchase or lease a vehicle?

A
all current monthly expenditures
B
the amount of cash saved
C
the cost of gas and insurance
D
all monthly car payments
60

Which factors can affect a stock’s price? Check all that apply.

A
market performance
B
the company’s financial health
C
the quantity products produced
D
location of the company
E
the economy

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