HPERSONAL FINANCE CHAPTER 13
QUESTIONS WITH COMPLETE
SOLUTION
Potential investors should not wait until they put their financial affairs in order before starting to invest. -
false
Which of the following is a true statement? - The first order of business for an investor is acquiring the
money needed to begin investing.
A short-term investment objective is one that will be accomplished within a period of - one year or less.
An intermediate-term investment objective is defined as one that will be accomplished within a period
of: - Less than one year
There is no relationship between risk and safety - false
The potential return of any investment should be directly related to the risk that the investor assumes. -
true
During inflationary times, there is a risk that the financial return on an investment will not keep pace
with the rate of inflation. - true
Gina Davidson has received $50,000 in a divorce settlement and is trying to decide how to invest it. She
has looked at stocks but knows that some stocks have lost a lot of value for their owners recently. What
aspect of investing is she most concerned about? - risk
Which one of the following individuals should have a higher tolerance for risk? - Darren carter, who
works for American Airlines and is worried that he is going to be laid off soon
Over the past 50 years, stocks and U.S. government bonds have returned about the same rate of return.
- true
Asset allocation is the process of spreading your assets among several different types of investments to
lessen risk. - true
Which one of the following investments offers the least amount of growth potential? - Options
Matt Jackson is single and 24. He has just graduated from college and obtained a job making $26,400 a
year. Which one of the following investments would you recommend for his long-term investment
program? - Growth stocks
QUESTIONS WITH COMPLETE
SOLUTION
Potential investors should not wait until they put their financial affairs in order before starting to invest. -
false
Which of the following is a true statement? - The first order of business for an investor is acquiring the
money needed to begin investing.
A short-term investment objective is one that will be accomplished within a period of - one year or less.
An intermediate-term investment objective is defined as one that will be accomplished within a period
of: - Less than one year
There is no relationship between risk and safety - false
The potential return of any investment should be directly related to the risk that the investor assumes. -
true
During inflationary times, there is a risk that the financial return on an investment will not keep pace
with the rate of inflation. - true
Gina Davidson has received $50,000 in a divorce settlement and is trying to decide how to invest it. She
has looked at stocks but knows that some stocks have lost a lot of value for their owners recently. What
aspect of investing is she most concerned about? - risk
Which one of the following individuals should have a higher tolerance for risk? - Darren carter, who
works for American Airlines and is worried that he is going to be laid off soon
Over the past 50 years, stocks and U.S. government bonds have returned about the same rate of return.
- true
Asset allocation is the process of spreading your assets among several different types of investments to
lessen risk. - true
Which one of the following investments offers the least amount of growth potential? - Options
Matt Jackson is single and 24. He has just graduated from college and obtained a job making $26,400 a
year. Which one of the following investments would you recommend for his long-term investment
program? - Growth stocks
