UGBA 135 CORRECT EXAMS SCRIPT QUESTIONS
AND ANSWERS SURE A+
✔✔If you buy a company's stock,
A. you have lent money to the company.
B. you own a part of the company.
C. the company will return your original investment to you with interest.
D. You are liable for the company's debts. - ✔✔B. you own a part of the company.
✔✔If you buy a company's bond,
A. you have lent money to the company.
B. you own a part of the company.
C. you are liable for the company's debts. - ✔✔A. you have lent money to the company.
✔✔If a company files for bankruptcy, which of the following securities is most at risk of
becoming virtually worthless?
A. The company's bonds.
B. The company's stock. - ✔✔B. The company's stock.
✔✔Holding a diversified portfolio of stocks rather than an undiversified portfolio
A. increases the likelihood that you will someday be as rich as Bill Gates is today.
B. increases the expected (average) return of the portfolio.
C. protects you from broad economy-wide risk.
D. increases the variance of the entire portfolio.
E. increases the likelihood that you will own at least one stock that performs poorly. -
✔✔E. increases the likelihood that you will own at least one stock that performs poorly.
✔✔T or F: Investments with higher risk always have higher expected returns - ✔✔False
, ✔✔Advertisements for online trading tend to emphasize which of the following?
A. That it is easy to trade online.
B. That trading is fun.
C. That making your own trading decisions puts you in control.
D. That trading online is expensive.
E. That the person on the other side of your trade probably knows more than you. -
✔✔A. That it is easy to trade online.
B. That trading is fun.
C. That making your own trading decisions puts you in control.
✔✔Why is Social Security called a PAYGO system?
A. Because the payroll taxes paid by current workers are used to pay current retirement
benefits.
B. Because the system is intended to pay benefits until it goes broke.
C. Because only people who pay into the system go onto collect benefits. - ✔✔A.
Because the payroll taxes paid by current workers are used to pay current retirement
benefits.
✔✔T or F: Most people in good health should claim Social Security retirement benefits
at age 62. - ✔✔False
✔✔T or F: Social Security started with a huge unfunded liability because benefits were
paid to retirees, such as Ida May Fuller, who had paid very little into the system. -
✔✔True
✔✔Psychologists find that when people are in a good mood their decision making is...
A. more critical
B. more spontaneous
C. more hesitant
D. more analytical - ✔✔B. more spontaneous
✔✔Which of the following makes renting more appealing versus buying?
A. Higher expected real estate appreciation
B. Higher rent
C. Higher Federal Income tax marginal tax rate
D. Higher interest rate on mortgage - ✔✔D. Higher interest rate on mortgage
✔✔T or F: Landlords can require tenants to have renters insurance. - ✔✔True
AND ANSWERS SURE A+
✔✔If you buy a company's stock,
A. you have lent money to the company.
B. you own a part of the company.
C. the company will return your original investment to you with interest.
D. You are liable for the company's debts. - ✔✔B. you own a part of the company.
✔✔If you buy a company's bond,
A. you have lent money to the company.
B. you own a part of the company.
C. you are liable for the company's debts. - ✔✔A. you have lent money to the company.
✔✔If a company files for bankruptcy, which of the following securities is most at risk of
becoming virtually worthless?
A. The company's bonds.
B. The company's stock. - ✔✔B. The company's stock.
✔✔Holding a diversified portfolio of stocks rather than an undiversified portfolio
A. increases the likelihood that you will someday be as rich as Bill Gates is today.
B. increases the expected (average) return of the portfolio.
C. protects you from broad economy-wide risk.
D. increases the variance of the entire portfolio.
E. increases the likelihood that you will own at least one stock that performs poorly. -
✔✔E. increases the likelihood that you will own at least one stock that performs poorly.
✔✔T or F: Investments with higher risk always have higher expected returns - ✔✔False
, ✔✔Advertisements for online trading tend to emphasize which of the following?
A. That it is easy to trade online.
B. That trading is fun.
C. That making your own trading decisions puts you in control.
D. That trading online is expensive.
E. That the person on the other side of your trade probably knows more than you. -
✔✔A. That it is easy to trade online.
B. That trading is fun.
C. That making your own trading decisions puts you in control.
✔✔Why is Social Security called a PAYGO system?
A. Because the payroll taxes paid by current workers are used to pay current retirement
benefits.
B. Because the system is intended to pay benefits until it goes broke.
C. Because only people who pay into the system go onto collect benefits. - ✔✔A.
Because the payroll taxes paid by current workers are used to pay current retirement
benefits.
✔✔T or F: Most people in good health should claim Social Security retirement benefits
at age 62. - ✔✔False
✔✔T or F: Social Security started with a huge unfunded liability because benefits were
paid to retirees, such as Ida May Fuller, who had paid very little into the system. -
✔✔True
✔✔Psychologists find that when people are in a good mood their decision making is...
A. more critical
B. more spontaneous
C. more hesitant
D. more analytical - ✔✔B. more spontaneous
✔✔Which of the following makes renting more appealing versus buying?
A. Higher expected real estate appreciation
B. Higher rent
C. Higher Federal Income tax marginal tax rate
D. Higher interest rate on mortgage - ✔✔D. Higher interest rate on mortgage
✔✔T or F: Landlords can require tenants to have renters insurance. - ✔✔True
