TEST BANK
ESSENTIALS OF INVESTMENTS 13TH EDITION (MCGRAW HILL,
2023) BY ZVI BODIE, ALEX KANE AND ALLAN J. MARCUS, ISBN
NO; 9781266085963, ALL 22 CHAPTERS COVERED
1|P a g e
, Test Bank for Essentials of Investments 13th Edition (McGraw Hill, 2023) by Zvi Bodie,
Alex Kane and Allan J. Marcus, Isbn no; 9781266085963, all 22 Chapters Covered
TABLE OF CONTENTS
1. Investments: Background and Issues
2. Asset Classes and Financial Instruments
3. Securities Markets
4. Mutual Funds and Other Investment Companies
5. Risk, Return, and the Historical Record
6. Efficient Diversification
7. Capital Asset Pricing and Arbitrage Pricing Theory
8. The Efficient Market Hypothesis
9. Behavioral Finance and Technical Analysis
10. Bond Prices and Yields
11. Managing Bond Portfolios
12. Macroeconomic and Industry Analysis
13. Equity Valuation
14. Financial Statement Analysis
15. Options Markets
16. Option Valuation
17. Futures Markets and Risk Management
18. Evaluating Investment Performance
19. International Diversification
20. Hedge Funds
21. Taxes, Inflation, and Investment Strategy
22. Investors and the Investment Process
2|P a g e
, Test Bank for Essentials of Investments 14th Edition (McGraw Hill, 2024) by Zvi Bodie,
Alex Kane and Allan J. Marcus, Isbn no; 9781266885389, all 22 Chapters Covered
Chapter 1: Investments: Background and Issues Sample (MCQs)
1. What is the primary goal of investing?
o A) To save money without any risk
o B) To allocate resources for generating income or profit
o C) To spend resources on consumption
o D) To minimize taxes
o Answer: B
2. Which of the following best describes diversification?
o A) Investing all funds in a single asset
o B) Spreading investments across various assets to reduce risk
o C) Investing only in high-risk assets for higher returns
o D) Keeping all investments in cash equivalents
o Answer: B
3. What is the fundamental trade-off in investing?
o A) Liquidity vs. Accessibility
o B) Risk vs. Return
o C) Time vs. Effort
o D) Diversification vs. Concentration
o Answer: B
4. Which investment strategy involves allocating assets among different categories to
balance risk and reward?
o A) Speculation
o B) Market Timing
o C) Asset Allocation
o D) Arbitrage
o Answer: C
5. Market volatility primarily affects which aspect of investing?
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, o A) Liquidity
o B) Diversification
o C) Risk
o D) Time Horizon
o Answer: C
6. ESG investing stands for:
o A) Equity, Securities, and Governance
o B) Environmental, Social, and Governance
o C) Economic, Social, and Growth
o D) Equity, Sustainability, and Growth
o Answer: B
7. A longer time horizon in investing generally allows for:
o A) Lower risk tolerance
o B) Higher liquidity needs
o C) Greater potential for higher returns
o D) Reduced diversification
o Answer: C
8. Which technological advancement is transforming investment management by using
algorithms to provide automated financial advice?
o A) Blockchain
o B) Robo-advisors
o C) High-frequency trading
o D) Fintech apps
o Answer: B
9. Regulatory changes in the investment landscape can impact:
o A) Investment strategies and product availability
o B) Only government bonds
o C) Real estate prices exclusively
o D) Currency exchange rates
4|P a g e
ESSENTIALS OF INVESTMENTS 13TH EDITION (MCGRAW HILL,
2023) BY ZVI BODIE, ALEX KANE AND ALLAN J. MARCUS, ISBN
NO; 9781266085963, ALL 22 CHAPTERS COVERED
1|P a g e
, Test Bank for Essentials of Investments 13th Edition (McGraw Hill, 2023) by Zvi Bodie,
Alex Kane and Allan J. Marcus, Isbn no; 9781266085963, all 22 Chapters Covered
TABLE OF CONTENTS
1. Investments: Background and Issues
2. Asset Classes and Financial Instruments
3. Securities Markets
4. Mutual Funds and Other Investment Companies
5. Risk, Return, and the Historical Record
6. Efficient Diversification
7. Capital Asset Pricing and Arbitrage Pricing Theory
8. The Efficient Market Hypothesis
9. Behavioral Finance and Technical Analysis
10. Bond Prices and Yields
11. Managing Bond Portfolios
12. Macroeconomic and Industry Analysis
13. Equity Valuation
14. Financial Statement Analysis
15. Options Markets
16. Option Valuation
17. Futures Markets and Risk Management
18. Evaluating Investment Performance
19. International Diversification
20. Hedge Funds
21. Taxes, Inflation, and Investment Strategy
22. Investors and the Investment Process
2|P a g e
, Test Bank for Essentials of Investments 14th Edition (McGraw Hill, 2024) by Zvi Bodie,
Alex Kane and Allan J. Marcus, Isbn no; 9781266885389, all 22 Chapters Covered
Chapter 1: Investments: Background and Issues Sample (MCQs)
1. What is the primary goal of investing?
o A) To save money without any risk
o B) To allocate resources for generating income or profit
o C) To spend resources on consumption
o D) To minimize taxes
o Answer: B
2. Which of the following best describes diversification?
o A) Investing all funds in a single asset
o B) Spreading investments across various assets to reduce risk
o C) Investing only in high-risk assets for higher returns
o D) Keeping all investments in cash equivalents
o Answer: B
3. What is the fundamental trade-off in investing?
o A) Liquidity vs. Accessibility
o B) Risk vs. Return
o C) Time vs. Effort
o D) Diversification vs. Concentration
o Answer: B
4. Which investment strategy involves allocating assets among different categories to
balance risk and reward?
o A) Speculation
o B) Market Timing
o C) Asset Allocation
o D) Arbitrage
o Answer: C
5. Market volatility primarily affects which aspect of investing?
3|P a g e
, o A) Liquidity
o B) Diversification
o C) Risk
o D) Time Horizon
o Answer: C
6. ESG investing stands for:
o A) Equity, Securities, and Governance
o B) Environmental, Social, and Governance
o C) Economic, Social, and Growth
o D) Equity, Sustainability, and Growth
o Answer: B
7. A longer time horizon in investing generally allows for:
o A) Lower risk tolerance
o B) Higher liquidity needs
o C) Greater potential for higher returns
o D) Reduced diversification
o Answer: C
8. Which technological advancement is transforming investment management by using
algorithms to provide automated financial advice?
o A) Blockchain
o B) Robo-advisors
o C) High-frequency trading
o D) Fintech apps
o Answer: B
9. Regulatory changes in the investment landscape can impact:
o A) Investment strategies and product availability
o B) Only government bonds
o C) Real estate prices exclusively
o D) Currency exchange rates
4|P a g e
