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TEST BANK
Fundamentals of Investing
Scott B. Smart
14th Edition
All Chapters Complete (Questions with Verified Answers)
,@ProfdocDigitalLibraries <Best Online Study Materials>
Table of Contents
Part One — Preparing to Invest
1. The Investment Environment
2. Securities Markets and Transactions
3. Investment Information and Securities
Transactions
Part Two — Important Conceptual Tools
4. Return and Risk
Appendix 4A. The Time Value of Money
5. Modern Portfolio Concepts
Part Three — Investing in Common Stocks
6. Common Stocks
7. Analyzing Common Stocks
8. Stock Valuation
9. Market Efficiency and Behavioral Finance
Part Four — Investing in Fixed-Income
Securities
10. Fixed-Income Securities
11. Bond Valuation
Part Five — Portfolio Management
12. Mutual Funds and Exchange-Traded Funds
13. Managing Your Own Portfolio
Part Six — Derivative Securities
14. Options: Puts and Calls
15. Futures Markets and Securities
Web Chapters
16. Investing in Preferred Stocks
17. Tax-Advantaged Investments
18. Real Estate and Other Tangible
Investments
,@ProfdocDigitalLibraries <Best Online Study Materials>
Chapter 1 The Investment Environment
1.1 Learning Goal 1
1) A non-interest bearing checking account is still considered an investment.
Answer: FALSE
Learning Outcome: F-12 Discuss the implications of systematic risk in financial markets and its
role in shaping investment choices
AACSB: 3 Analytical thinking
Question Status: Previous Edition
Learning Goal: Learning Goal 1
2) Land and buildings are examples of real property investments.
Answer: TRUE
Learning Outcome: F-12 Discuss the implications of systematic risk in financial markets and its
role in shaping investment choices
AACSB: 3 Analytical thinking
Question Status: Previous Edition
Learning Goal: Learning Goal 1
3) Since 1900, the average return on stocks has exceeded the average return on savings
accounts by more than 6 percentage points.
Answer: TRUE
Learning Outcome: F-12 Discuss the implications of systematic risk in financial markets and its
role in shaping investment choices
AACSB: 3 Analytical thinking
Question Status: Previous Edition
Learning Goal: Learning Goal 1
4) A United States Savings Bond is an example of an investment as defined in the text.
Answer: TRUE
Learning Outcome: F-12 Discuss the implications of systematic risk in financial markets and its
role in shaping investment choices
AACSB: 3 Analytical thinking
Question Status: Previous Edition
Learning Goal: Learning Goal 1
5) Most sources of investment information are in print format, expensive, and difficult to
access.
Answer: FALSE
Learning Outcome: F-12 Discuss the implications of systematic risk in financial markets and its
role in shaping investment choices
AACSB: 3 Analytical thinking
Question Status: New Question
Learning Goal: Learning Goal 1
, @ProfdocDigitalLibraries <Best Online Study Materials>
6) Which of the following is NOT an investment as defined in the text?
A) a certificate of deposit issued by a bank
B) a new automobile
C) a United States Saving Bond
D) a mutual fund held in a retirement account
Answer: B
Learning Outcome: F-12 Discuss the implications of systematic risk in financial markets and its
role in shaping investment choices
AACSB: 3 Analytical thinking
Question Status: Previous Edition
Learning Goal: Learning Goal 1
7) Stocks are a(n) investment representing of a business.
A) direct; ownership
B) direct; debt
C) indirect; ownership
D) indirect; debt
Answer: A
Learning Outcome: F-12 Discuss the implications of systematic risk in financial markets and its
role in shaping investment choices
AACSB: 3 Analytical thinking
Question Status: Previous Edition
Learning Goal: Learning Goal 1
8) An exchange traded fund that invests in the stocks of large corporations is an example of
A) direct investment.
B) indirect investment.
C) derivative investment.
D) tangible investment.
Answer: B
Learning Outcome: F-12 Discuss the implications of systematic risk in financial markets and its
role in shaping investment choices
AACSB: 3 Analytical thinking
Question Status: Previous Edition
Learning Goal: Learning Goal 1
9) Which of the following has declined in recent years?
A) direct ownership of stock by individual investors
B) the percentage of foreign stocks held in typical portfolios
C) institutional ownership of common stocks
D) the timeliness of information available to investors
Answer: A
Learning Outcome: F-12 Discuss the implications of systematic risk in financial markets and its
role in shaping investment choices
AACSB: 3 Analytical thinking
Question Status: Previous Edition
Learning Goal: Learning Goal 1
TEST BANK
Fundamentals of Investing
Scott B. Smart
14th Edition
All Chapters Complete (Questions with Verified Answers)
,@ProfdocDigitalLibraries <Best Online Study Materials>
Table of Contents
Part One — Preparing to Invest
1. The Investment Environment
2. Securities Markets and Transactions
3. Investment Information and Securities
Transactions
Part Two — Important Conceptual Tools
4. Return and Risk
Appendix 4A. The Time Value of Money
5. Modern Portfolio Concepts
Part Three — Investing in Common Stocks
6. Common Stocks
7. Analyzing Common Stocks
8. Stock Valuation
9. Market Efficiency and Behavioral Finance
Part Four — Investing in Fixed-Income
Securities
10. Fixed-Income Securities
11. Bond Valuation
Part Five — Portfolio Management
12. Mutual Funds and Exchange-Traded Funds
13. Managing Your Own Portfolio
Part Six — Derivative Securities
14. Options: Puts and Calls
15. Futures Markets and Securities
Web Chapters
16. Investing in Preferred Stocks
17. Tax-Advantaged Investments
18. Real Estate and Other Tangible
Investments
,@ProfdocDigitalLibraries <Best Online Study Materials>
Chapter 1 The Investment Environment
1.1 Learning Goal 1
1) A non-interest bearing checking account is still considered an investment.
Answer: FALSE
Learning Outcome: F-12 Discuss the implications of systematic risk in financial markets and its
role in shaping investment choices
AACSB: 3 Analytical thinking
Question Status: Previous Edition
Learning Goal: Learning Goal 1
2) Land and buildings are examples of real property investments.
Answer: TRUE
Learning Outcome: F-12 Discuss the implications of systematic risk in financial markets and its
role in shaping investment choices
AACSB: 3 Analytical thinking
Question Status: Previous Edition
Learning Goal: Learning Goal 1
3) Since 1900, the average return on stocks has exceeded the average return on savings
accounts by more than 6 percentage points.
Answer: TRUE
Learning Outcome: F-12 Discuss the implications of systematic risk in financial markets and its
role in shaping investment choices
AACSB: 3 Analytical thinking
Question Status: Previous Edition
Learning Goal: Learning Goal 1
4) A United States Savings Bond is an example of an investment as defined in the text.
Answer: TRUE
Learning Outcome: F-12 Discuss the implications of systematic risk in financial markets and its
role in shaping investment choices
AACSB: 3 Analytical thinking
Question Status: Previous Edition
Learning Goal: Learning Goal 1
5) Most sources of investment information are in print format, expensive, and difficult to
access.
Answer: FALSE
Learning Outcome: F-12 Discuss the implications of systematic risk in financial markets and its
role in shaping investment choices
AACSB: 3 Analytical thinking
Question Status: New Question
Learning Goal: Learning Goal 1
, @ProfdocDigitalLibraries <Best Online Study Materials>
6) Which of the following is NOT an investment as defined in the text?
A) a certificate of deposit issued by a bank
B) a new automobile
C) a United States Saving Bond
D) a mutual fund held in a retirement account
Answer: B
Learning Outcome: F-12 Discuss the implications of systematic risk in financial markets and its
role in shaping investment choices
AACSB: 3 Analytical thinking
Question Status: Previous Edition
Learning Goal: Learning Goal 1
7) Stocks are a(n) investment representing of a business.
A) direct; ownership
B) direct; debt
C) indirect; ownership
D) indirect; debt
Answer: A
Learning Outcome: F-12 Discuss the implications of systematic risk in financial markets and its
role in shaping investment choices
AACSB: 3 Analytical thinking
Question Status: Previous Edition
Learning Goal: Learning Goal 1
8) An exchange traded fund that invests in the stocks of large corporations is an example of
A) direct investment.
B) indirect investment.
C) derivative investment.
D) tangible investment.
Answer: B
Learning Outcome: F-12 Discuss the implications of systematic risk in financial markets and its
role in shaping investment choices
AACSB: 3 Analytical thinking
Question Status: Previous Edition
Learning Goal: Learning Goal 1
9) Which of the following has declined in recent years?
A) direct ownership of stock by individual investors
B) the percentage of foreign stocks held in typical portfolios
C) institutional ownership of common stocks
D) the timeliness of information available to investors
Answer: A
Learning Outcome: F-12 Discuss the implications of systematic risk in financial markets and its
role in shaping investment choices
AACSB: 3 Analytical thinking
Question Status: Previous Edition
Learning Goal: Learning Goal 1
