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FHCE 3200 Exam 3 Questions and Correct
Answers/ Latest Update / Already Graded
the possibility of losing money
Ans: risk
prices increase over time
Ans: inflation risk
a company in which you invest closes
Ans: business risk
general interest rates increase
Ans: interest rate risk
you cannot sell something you own due to a weak market
Ans: liquidity risk
money you make on an investment
Ans: return
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actual percentage return
Ans: nominal return
1% return for your bank account
Ans: nominal return
inflation-adjusted return
Ans: real rate of return
If prices increase by 3%, you really lose 2% in purchasing power
Ans: real rate of return
Real rate of return formula
Ans: (1+nominal return)/(1+inflation rate) -1
perception of the riskiness associated with a behavior or decision
Ans: subjective risk
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based on your personally developed probabilities of potential losses
Ans: subjective risk
based on expectations, fears, and worries
Ans: subjective risk
varies from one person to another
Ans: subjective risk
ranking of risk using actual statistics
Ans: objective risk
can be measured using probabilities
Ans: objective risk
money put aside for short-term goals
Ans: savings
assets purchased to reach long-term goals
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Ans: investments
how quickly you can convert an asset into cash
Ans: liquidity
cash in your pocket
Ans: liquidity
assets held in banks and credit unions
Ans: liquidity
usually generates lower returns
Ans: liquidity
What needs to be very liquid?
Ans: an emergency fund
immediately accessible in case of unexpected expenses
Ans: emergency fund
All rights reserved © 2025/ 2026 |
FHCE 3200 Exam 3 Questions and Correct
Answers/ Latest Update / Already Graded
the possibility of losing money
Ans: risk
prices increase over time
Ans: inflation risk
a company in which you invest closes
Ans: business risk
general interest rates increase
Ans: interest rate risk
you cannot sell something you own due to a weak market
Ans: liquidity risk
money you make on an investment
Ans: return
All rights reserved © 2025/ 2026 |
, Page |2
actual percentage return
Ans: nominal return
1% return for your bank account
Ans: nominal return
inflation-adjusted return
Ans: real rate of return
If prices increase by 3%, you really lose 2% in purchasing power
Ans: real rate of return
Real rate of return formula
Ans: (1+nominal return)/(1+inflation rate) -1
perception of the riskiness associated with a behavior or decision
Ans: subjective risk
All rights reserved © 2025/ 2026 |
, Page |3
based on your personally developed probabilities of potential losses
Ans: subjective risk
based on expectations, fears, and worries
Ans: subjective risk
varies from one person to another
Ans: subjective risk
ranking of risk using actual statistics
Ans: objective risk
can be measured using probabilities
Ans: objective risk
money put aside for short-term goals
Ans: savings
assets purchased to reach long-term goals
All rights reserved © 2025/ 2026 |
, Page |4
Ans: investments
how quickly you can convert an asset into cash
Ans: liquidity
cash in your pocket
Ans: liquidity
assets held in banks and credit unions
Ans: liquidity
usually generates lower returns
Ans: liquidity
What needs to be very liquid?
Ans: an emergency fund
immediately accessible in case of unexpected expenses
Ans: emergency fund
All rights reserved © 2025/ 2026 |