FFM Final Exam (2026/2027) | Newest
Questions | 100% Correct Answers | A+
Verified
• stocks. CORRECT ANSWER: shares of ownership in a corporation
• bonds. CORRECT ANSWER: a debt instrument issued by an
organization that promises repayment at a specific time and the right to
receive regular interest payments during the life of the bond
• portfolio. CORRECT ANSWER: collection of investments assembled to
meet your investment goals
• financial risk. CORRECT ANSWER: the possibility that the investment
will fail to pay any return to the investor.
• total return. CORRECT ANSWER: the income an investment generates
from a combination of current income and capital gains
• current income. CORRECT ANSWER: money received while you own
an investment. It is usually received on a regular basis as interest, rent,
or dividends
• interest. CORRECT ANSWER: charge for borrowing money; investors
in bonds earn interest
,• dividend. CORRECT ANSWER: a portion of a company's earnings that
the firm pays out to its shareholders
• capital gain. CORRECT ANSWER: occurs only when you actually sell an
investment that has increased in value. (subtract the total amount paid
for the investment from the higher price at which it is sold)
• capital losses. CORRECT ANSWER: o decrease in paper value of an
initial investment; only realized if sold
• rate of return/yield. CORRECT ANSWER: the total return on an
investment expressed as a percentage of its price.
• pure risk. CORRECT ANSWER: o exists when there is no potential for
gain, only the possibility of loss
• speculative risk. CORRECT ANSWER: involves the potential for either
gain or loss; equity investments might do either
• investment risk. CORRECT ANSWER: represents the uncertainty that
the yield on an investment will deviate from what is expected.
• risk premium. CORRECT ANSWER: the difference between a riskier
investment's expected return and the totally safe return on the T-bill
, • risk aversion. CORRECT ANSWER: in investments, one who tends to
dislike risk and is unable to put money into investments that seem risky
• random risk. CORRECT ANSWER: risk associated with owning only one
investment of a particular type that, by chance, may do very poorly in
the future due to uncontrollable or random factors that do not affect
the rest of the market
• market risk. CORRECT ANSWER: the possibility for an investor to
experience losses due to unknown factors that affect the overall
performance of the financial markets
• business failure risk. CORRECT ANSWER: the possibility that an
investment will fail and pay to pay a return to the investor
• inflation risk. CORRECT ANSWER: the danger that your money will not
grow as fast as inflation and therefore not be worth as much in the
future as it is today
• time horizon risk. CORRECT ANSWER: the role of time affects all
investments. The sooner your invested money is supposed to be
returned to you, the less the likelihood that something could go wrong.
The more time your money is invested, the more it is at risk
Questions | 100% Correct Answers | A+
Verified
• stocks. CORRECT ANSWER: shares of ownership in a corporation
• bonds. CORRECT ANSWER: a debt instrument issued by an
organization that promises repayment at a specific time and the right to
receive regular interest payments during the life of the bond
• portfolio. CORRECT ANSWER: collection of investments assembled to
meet your investment goals
• financial risk. CORRECT ANSWER: the possibility that the investment
will fail to pay any return to the investor.
• total return. CORRECT ANSWER: the income an investment generates
from a combination of current income and capital gains
• current income. CORRECT ANSWER: money received while you own
an investment. It is usually received on a regular basis as interest, rent,
or dividends
• interest. CORRECT ANSWER: charge for borrowing money; investors
in bonds earn interest
,• dividend. CORRECT ANSWER: a portion of a company's earnings that
the firm pays out to its shareholders
• capital gain. CORRECT ANSWER: occurs only when you actually sell an
investment that has increased in value. (subtract the total amount paid
for the investment from the higher price at which it is sold)
• capital losses. CORRECT ANSWER: o decrease in paper value of an
initial investment; only realized if sold
• rate of return/yield. CORRECT ANSWER: the total return on an
investment expressed as a percentage of its price.
• pure risk. CORRECT ANSWER: o exists when there is no potential for
gain, only the possibility of loss
• speculative risk. CORRECT ANSWER: involves the potential for either
gain or loss; equity investments might do either
• investment risk. CORRECT ANSWER: represents the uncertainty that
the yield on an investment will deviate from what is expected.
• risk premium. CORRECT ANSWER: the difference between a riskier
investment's expected return and the totally safe return on the T-bill
, • risk aversion. CORRECT ANSWER: in investments, one who tends to
dislike risk and is unable to put money into investments that seem risky
• random risk. CORRECT ANSWER: risk associated with owning only one
investment of a particular type that, by chance, may do very poorly in
the future due to uncontrollable or random factors that do not affect
the rest of the market
• market risk. CORRECT ANSWER: the possibility for an investor to
experience losses due to unknown factors that affect the overall
performance of the financial markets
• business failure risk. CORRECT ANSWER: the possibility that an
investment will fail and pay to pay a return to the investor
• inflation risk. CORRECT ANSWER: the danger that your money will not
grow as fast as inflation and therefore not be worth as much in the
future as it is today
• time horizon risk. CORRECT ANSWER: the role of time affects all
investments. The sooner your invested money is supposed to be
returned to you, the less the likelihood that something could go wrong.
The more time your money is invested, the more it is at risk
