,Chapter No. 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: 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: 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
Page-1
,Learning Outcome: F-12 Discuss the implications of systematic risk in financial markets and its role
in shaping investment choices
AACSB: 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: 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: Analytical thinking
Question Status: Previous Edition
Learning Goal: Learning Goal 1
6) Which of the following is NOT an investment as defined in the text?
Page-2
, 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: 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: Analytical thinking
Question Status: Previous Edition
Learning Goal: Learning Goal 1
Page-3
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: 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: 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
Page-1
,Learning Outcome: F-12 Discuss the implications of systematic risk in financial markets and its role
in shaping investment choices
AACSB: 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: 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: Analytical thinking
Question Status: Previous Edition
Learning Goal: Learning Goal 1
6) Which of the following is NOT an investment as defined in the text?
Page-2
, 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: 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: Analytical thinking
Question Status: Previous Edition
Learning Goal: Learning Goal 1
Page-3
