Test Bank for Investments, 12th Edition, Zvi Bodie, Alex Kane, Alan Marcus, ISBN10: 1260013839, ISBN13: 9781260013832

Test Bank for Investments, 12th Edition, Zvi Bodie, Alex Kane, Alan Marcus, ISBN10: 9, ISBN13: 3832 1. Award: 1.00 point The material wealth of a society is a function of  all financial assets.  all real assets.  all financial and real assets.  all physical assets. The material wealth of a society is a function of all real assets. References Multiple Choice Difficulty: 1 Basic 2. Award: 10.00 points are real assets.  Land  Machines  Stocks and bonds  Knowledge  Land, machines, and knowledge Land, machines and knowledge are real assets; stocks and bonds are financial assets. References Multiple Choice Difficulty: 1 Basic The means by which individuals hold their claims on real assets in a well-developed economy are  investment assets.  depository assets.  derivative assets.  financial assets.  exchange-driven assets. Financial assets allocate the wealth of the economy. Example: it is easier for an individual to own shares of an auto company than to own an auto company directly. References Difficulty: 1 Basic 4. Award: 10.00 points are financial assets.  Bonds  Machines  Stocks  Bonds and stocks  Bonds, machines, and stocks Machines are real assets; stocks and bonds are financial assets. References Difficulty: 1 Basic 5. Award: 10.00 points financial asset(s).  Buildings are  Land is a  Derivatives are  U.S. agency bonds are  Derivatives and U.S. agency bonds are Buildings and land are real assets. References Difficulty: 1 Basic Financial assets  directly contribute to the country's productive capacity.  indirectly contribute to the country's productive capacity.  contribute to the country's productive capacity, both directly and indirectly.  do not contribute to the country's productive capacity, either directly or indirectly.  are of no value to anyone. Financial assets indirectly contribute to the country's productive capacity because these assets permit individuals to invest in firms and governments. This in turn allows firms and governments to increase productive capacity. References Difficulty: 1 Basic 7. Award: 10.00 points In 2018, was the most significant real asset of U.S. households in terms of total value.  consumer durables  automobiles  real estate  mutual fund shares  bank loans Assets Real assets $ Billion % Total Liabilities and Net Worth Liabilities $ Billion $ Total Real estate $ 28,816 23.5% Mortgages $ 10,437 8.5% Consumer durables 5,411 4.4 Consumer credit 3,865 3.2 Other 628 0.5 Bank and other loans 1,207 1.0 Total real assets $ 34,855 28.4% Other 219 0.2 Total liabilities $ 15,727 12.8% Financial assets Deposits and money market shares $ 12,442 10.1% Life insurance reserves 1,647 1.3 Pension reserves 26,069 21.3 Corporate equity 18,106 14.8 Equity in noncorporate business 13,044 10.6 Mutual fund shares 8,764 7.1 Debt securities 6,210 5.1 Other 1,521 1.2 Total financial assets $ 87,802 71.6 Net worth 106,929 87.2 Total $ 122,657 100.0% $ 122,657 100.0% Balance sheet of U.S. households Note: Column sums may differ from total because of rounding error. Source: Flow of Funds Accounts of the United States, Board of Governors of the Federal Reserve System, September 2018. References Difficulty: 1 Basic In 2018, was the least significant financial asset of U.S. households in terms of total value.  real estate  mutual fund shares  debt securities  life insurance reserves  pension reserves Assets Real assets $ Billion % Total Liabilities and Net Worth Liabilities $ Billion $ Total Real estate $ 28,816 23.5% Mortgages $ 10,437 8.5% Consumer durables 5,411 4.4 Consumer credit 3,865 3.2 Other 628 0.5 Bank and other loans 1,207 1.0 Total real assets $ 34,855 28.4% Other 219 0.2 Total liabilities $ 15,727 12.8% Financial assets Deposits and money market shares $ 12,442 10.1%