Test Bank for Investment Strategies,
Principles and Different Sites with Risks
Taken Exam Complete Questions with
Correct Answers A+ GRADED
Which is an example of a high-risk investment? - ANSWER ✔ -Stock
in a start-up company
What is the relationship between risk and return? - ANSWER ✔ -A
higher risk often means a higher return.
Which of these investments may be long term? Check all that apply. -
ANSWER ✔ Mutual funds
Bonds
Retirement funds
Commodities
Money that has been spent and cannot be recovered is known as costs. -
ANSWER ✔ sunk
Which statements are true regarding an individual retirement account?
Check all that apply. - ANSWER ✔ -People can contribute to the
account until retirement age.
-Contributions to the account are limited each year.
-Contributions can be deducted from federal taxes.
Which is a commodity someone might invest in? - ANSWER ✔ natural
resources
,People who make money investing in the stock market - ANSWER ✔
must pay taxes on profits.
Which are common mistakes people make when investing? Check all
they apply. - ANSWER ✔ -They put all of their money into one kind of
investment at a time.
-They invest more money than they can afford.
-They focus heavily on familiar investment opportunities.
-They hold onto investments longer than they should to recoup losses.
Analyzing the likelihood of the economy changing is part of
understanding the of an investment. - ANSWER ✔ RISKS
A couple has decided to increase their income from investments for
when they retire in twenty years. Which is the best way they can
accomplish that goal? - ANSWER ✔ by enrolling in a 401k and
investing in the stock market
Which investment advice would Gayle most likely give to Alex? -
ANSWER ✔ Spread your investments in several different areas.
Which investment has the least liquidity? - ANSWER ✔ NOT
a savings account
NOT
property
An investment with more liquidity would be ideal for someone who -
ANSWER ✔ knows they will need cash in the near future.
What is the purpose of making an estate plan? - ANSWER ✔ to protect
property for distribution after death
What are the main rules of writing a will? Check all that apply. -
ANSWER ✔ -In most states, you must be eighteen or older.
, -The document must clearly state that it is your will
-A will must be written in sound judgement and mental capacity.
-An executor must be named to oversee the distribution of the estate.
What is the role of an executor in estate planning? - ANSWER ✔
settling the estate according to what the deceased person wants
What are the responsibilities of an executor? Check all that apply. -
ANSWER ✔ -paying any taxes that are due on the estate
-taking inventory of the property and belongings
-appraising and distributing the deceased person's assets
-settling any debts that are owed by the deceased
A declination is filed by a(n) ___1___ when he or she ___2___.
When this occurs, a contingent ___3___ takes over the responsibilitie -
ANSWER ✔ 1.) EXECUTOR
2.) DOES NOT WANT TO SERVE
3.) EXECUTOR
Why is it risky to invest in a commodity? - ANSWER ✔ The
commodity's price might drop significantly very quicklyBased on the
graphic
what advantage does this 401k have over other types of investments? -
ANSWER ✔ It incentivizes employees to contribute by offering an
employer match.
What are the benefits of naming a secondary beneficiary in a will?
Check all that apply. - ANSWER ✔ -It could prevent a will from going
into probate.
-It avoids confusion if the primary beneficiary dies first.
-It allows for another option if the primary beneficiary cannot inherit.
Principles and Different Sites with Risks
Taken Exam Complete Questions with
Correct Answers A+ GRADED
Which is an example of a high-risk investment? - ANSWER ✔ -Stock
in a start-up company
What is the relationship between risk and return? - ANSWER ✔ -A
higher risk often means a higher return.
Which of these investments may be long term? Check all that apply. -
ANSWER ✔ Mutual funds
Bonds
Retirement funds
Commodities
Money that has been spent and cannot be recovered is known as costs. -
ANSWER ✔ sunk
Which statements are true regarding an individual retirement account?
Check all that apply. - ANSWER ✔ -People can contribute to the
account until retirement age.
-Contributions to the account are limited each year.
-Contributions can be deducted from federal taxes.
Which is a commodity someone might invest in? - ANSWER ✔ natural
resources
,People who make money investing in the stock market - ANSWER ✔
must pay taxes on profits.
Which are common mistakes people make when investing? Check all
they apply. - ANSWER ✔ -They put all of their money into one kind of
investment at a time.
-They invest more money than they can afford.
-They focus heavily on familiar investment opportunities.
-They hold onto investments longer than they should to recoup losses.
Analyzing the likelihood of the economy changing is part of
understanding the of an investment. - ANSWER ✔ RISKS
A couple has decided to increase their income from investments for
when they retire in twenty years. Which is the best way they can
accomplish that goal? - ANSWER ✔ by enrolling in a 401k and
investing in the stock market
Which investment advice would Gayle most likely give to Alex? -
ANSWER ✔ Spread your investments in several different areas.
Which investment has the least liquidity? - ANSWER ✔ NOT
a savings account
NOT
property
An investment with more liquidity would be ideal for someone who -
ANSWER ✔ knows they will need cash in the near future.
What is the purpose of making an estate plan? - ANSWER ✔ to protect
property for distribution after death
What are the main rules of writing a will? Check all that apply. -
ANSWER ✔ -In most states, you must be eighteen or older.
, -The document must clearly state that it is your will
-A will must be written in sound judgement and mental capacity.
-An executor must be named to oversee the distribution of the estate.
What is the role of an executor in estate planning? - ANSWER ✔
settling the estate according to what the deceased person wants
What are the responsibilities of an executor? Check all that apply. -
ANSWER ✔ -paying any taxes that are due on the estate
-taking inventory of the property and belongings
-appraising and distributing the deceased person's assets
-settling any debts that are owed by the deceased
A declination is filed by a(n) ___1___ when he or she ___2___.
When this occurs, a contingent ___3___ takes over the responsibilitie -
ANSWER ✔ 1.) EXECUTOR
2.) DOES NOT WANT TO SERVE
3.) EXECUTOR
Why is it risky to invest in a commodity? - ANSWER ✔ The
commodity's price might drop significantly very quicklyBased on the
graphic
what advantage does this 401k have over other types of investments? -
ANSWER ✔ It incentivizes employees to contribute by offering an
employer match.
What are the benefits of naming a secondary beneficiary in a will?
Check all that apply. - ANSWER ✔ -It could prevent a will from going
into probate.
-It avoids confusion if the primary beneficiary dies first.
-It allows for another option if the primary beneficiary cannot inherit.
