Test bank Fundamentals of Investing, 13edition by scott b smart

Test bank
Fundamentals of Investing,
13edition by scott b smart


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`investme
nt`choices
AACSB:` 3`Analytical`thinking`Questio
n`Status:` Previous`Edition`Learning`Go
al:` 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`investme
nt`choices
AACSB:` 3`Analytical`thinking`Questio
n`Status:` Previous`Edition`Learning`Go
al:` 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`investme
nt`choices
AACSB:` 3`Analytical`thinking`Questio
n`Status:` Previous`Edition`Learning`Go
al:` 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`investme
nt`choices
AACSB:` 3`Analytical`thinking`Questio
1

,n`Status:` Previous`Edition`Learning`Go
al:` 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`investm
ent`choices
AACSB:` 3`Analytical`thinking`
Question`Status:` New`Question`
Learning`Goal:` Learning`Goal`1




2

,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`investme
nt`choices
AACSB:` 3`Analytical`thinking`Questio
n`Status:` Previous`Edition`Learning`Go
al:` 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`investme
nt`choices
AACSB:` 3`Analytical`thinking`Questio
n`Status:` Previous`Edition`Learning`Go
al:` 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`investme
nt`choices
AACSB:` 3`Analytical`thinking`Questio
n`Status:` Previous`Edition`Learning`Go
al:` 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`investme
3

, nt`choices
AACSB:` 3`Analytical`thinking`Questio
n`Status:` Previous`Edition`Learning`Go
al:` Learning`Goal`1




4