TEST BANK FOR
Essentials Of Investments 12th Edition Zvi Bodie, Alex Kane, Alan J. Marcus
Chapter 1-22
Answers are at the end of Each Chapter
Chapter 1
Student name:
MULTIPLE CHOICE - Choose the one alternative that best completes the statement or
answers the question.
1) Financial assets represent of total assets of U.S. households in 2019.
A) about 70%
B) over 90%
C) under 10%
D) about 30%
2) Real assets in the economy include all but which one of the following?
A) Land
B) Buildings
C) Consumer durables
D) Common stock
3) In 2019, net worth represented of the liabilities and net worth of commercial
banks.
A) about 51%
B) about 91%
C) about 11%
D) about 31%
Version 1 1
Downloaded by: akramrq12 | Want to earn $1.236
Distribution of this document is illegal extra per year?
,4) According to the Flow of Funds Accounts of the United States, the largest single asset of
U.S. households is .
A) mutual fund shares
B) real estate
C) pension reserves
D) corporate equity
5) According to the Flow of Funds Accounts of the United States, the largest liability of
U.S. households is .
A) mortgages
B) consumer credit
C) bank loans
D) gambling debts
6) is not a derivative security.
A) A share of common stock
B) A call option
C) A futures contract
D) A put option
7) According to the Flow of Funds Accounts of the United States, the largest financial asset
of U.S. households is .
A) mutual fund shares
B) corporate equity
C) pension reserves
D) deposits
Version 1 2
Downloaded by: akramrq12 | Want to earn $1.236
Distribution of this document is illegal extra per year?
,8) Active trading in markets and competition among securities analysts helps ensure that:
1. Security prices approach informational efficiency.
2. Riskier securities are priced to offer higher potential returns.
3. Investors are unlikely to be able to consistently find under- or overvalued securities.
A) 1 only
B) 1 and 2 only
C) 2 and 3 only
D) 1, 2, and 3
9) The material wealth of society is determined by the economy's , which is a
function of the economy's .
A) investment bankers; financial assets
B) investment bankers; real assets
C) productive capacity; financial assets
D) productive capacity; real assets
10) Which of the following is not a money market security?
A) U.S. Treasury bill
B) 6-month maturity certificate of deposit
C) common stock
D) mortgage backed security
11) assets generate net income to the economy, and assets define
allocation of income among investors.
A) Financial; financial
B) Financial; real
C) Real; financial
D) Real; real
Version 1 3
Downloaded by: akramrq12 | Want to earn $1.236
Distribution of this document is illegal extra per year?
, 12) Which of the following are financial assets?
1. Debt securities
2. Equity securities
3. Derivative securities
A) 1 only
B) 1 and 2 only
C) 2 and 3 only
D) 1, 2, and 3
13) are examples of financial intermediaries.
A) Commercial banks
B) Insurance companies
C) Investment companies
D) All of the choices are correct.
14) Asset allocation refers to .
A) the allocation of the investment portfolio across broad asset classes
B) the analysis of the value of securities
C) the choice of specific assets within each asset class
D) None of the choices are correct.
15) Which one of the following best describes the purpose of derivatives markets?
A) Transferring risk from one party to another.
B) Investing for a short time period to earn a small rate of return.
C) Investing for retirement
D) Earning interest income
Version 1 4
Downloaded by: akramrq12 | Want to earn $1.236
Distribution of this document is illegal extra per year?
Essentials Of Investments 12th Edition Zvi Bodie, Alex Kane, Alan J. Marcus
Chapter 1-22
Answers are at the end of Each Chapter
Chapter 1
Student name:
MULTIPLE CHOICE - Choose the one alternative that best completes the statement or
answers the question.
1) Financial assets represent of total assets of U.S. households in 2019.
A) about 70%
B) over 90%
C) under 10%
D) about 30%
2) Real assets in the economy include all but which one of the following?
A) Land
B) Buildings
C) Consumer durables
D) Common stock
3) In 2019, net worth represented of the liabilities and net worth of commercial
banks.
A) about 51%
B) about 91%
C) about 11%
D) about 31%
Version 1 1
Downloaded by: akramrq12 | Want to earn $1.236
Distribution of this document is illegal extra per year?
,4) According to the Flow of Funds Accounts of the United States, the largest single asset of
U.S. households is .
A) mutual fund shares
B) real estate
C) pension reserves
D) corporate equity
5) According to the Flow of Funds Accounts of the United States, the largest liability of
U.S. households is .
A) mortgages
B) consumer credit
C) bank loans
D) gambling debts
6) is not a derivative security.
A) A share of common stock
B) A call option
C) A futures contract
D) A put option
7) According to the Flow of Funds Accounts of the United States, the largest financial asset
of U.S. households is .
A) mutual fund shares
B) corporate equity
C) pension reserves
D) deposits
Version 1 2
Downloaded by: akramrq12 | Want to earn $1.236
Distribution of this document is illegal extra per year?
,8) Active trading in markets and competition among securities analysts helps ensure that:
1. Security prices approach informational efficiency.
2. Riskier securities are priced to offer higher potential returns.
3. Investors are unlikely to be able to consistently find under- or overvalued securities.
A) 1 only
B) 1 and 2 only
C) 2 and 3 only
D) 1, 2, and 3
9) The material wealth of society is determined by the economy's , which is a
function of the economy's .
A) investment bankers; financial assets
B) investment bankers; real assets
C) productive capacity; financial assets
D) productive capacity; real assets
10) Which of the following is not a money market security?
A) U.S. Treasury bill
B) 6-month maturity certificate of deposit
C) common stock
D) mortgage backed security
11) assets generate net income to the economy, and assets define
allocation of income among investors.
A) Financial; financial
B) Financial; real
C) Real; financial
D) Real; real
Version 1 3
Downloaded by: akramrq12 | Want to earn $1.236
Distribution of this document is illegal extra per year?
, 12) Which of the following are financial assets?
1. Debt securities
2. Equity securities
3. Derivative securities
A) 1 only
B) 1 and 2 only
C) 2 and 3 only
D) 1, 2, and 3
13) are examples of financial intermediaries.
A) Commercial banks
B) Insurance companies
C) Investment companies
D) All of the choices are correct.
14) Asset allocation refers to .
A) the allocation of the investment portfolio across broad asset classes
B) the analysis of the value of securities
C) the choice of specific assets within each asset class
D) None of the choices are correct.
15) Which one of the following best describes the purpose of derivatives markets?
A) Transferring risk from one party to another.
B) Investing for a short time period to earn a small rate of return.
C) Investing for retirement
D) Earning interest income
Version 1 4
Downloaded by: akramrq12 | Want to earn $1.236
Distribution of this document is illegal extra per year?
