Test Bank for Investments: Analysis and Management, 15th Edition by Gerald R. Jensen

test_bank_for_investments_analysis_and_ma
nagement__15th_edition_charles_p._jones__
gerald_r._jensen
File:2ch01:2Understanding2Investments



Multiple2Choice

1. Which2of2the2following2is2the2best2definition2of2wealth?

a. The2sum2of2all2current2and2future2income
b. The2total2of2all2assets2and2all2income
c. The2total2of2assets2and2income2less2any2liabilities
d. The2sum2of2current2income2and2the2present2value2of2future2income

Ans:2d
Difficulty:2Moderate
Ref:2Establishing2a2Framework2for2Investors

2. Gold2coins2would2be2classified2as:

a. real2assets.
b. indirect2assets.
c. personal2assets.
d. financial2assets.

Ans:2a2Difficult
y:2Easy
Ref:2Establishing2a2Framework2for2Investors

3. Technically,2investments2include:

a. only2financial2assets.
b. only2marketable2assets.
c. financial2and2real2assets2that2are2marketable2or2non-marketable.
d. only2financial2and2real2assets2that2are2marketable.

Ans:2c2Difficult
y:2Easy
Ref:2Establishing2a2Framework2for2Investors

4. The2retirement2plans2that2guarantee2retirees2a2set2amount2of2money2each2mont
h2are2known2as:

a. 401(k)2plans.
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,b. self-directed2plans.
c. defined-benefit2plans.
d. defined-contribution2plans.




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,Ans:2c
Difficulty:2Moderate
Ref:2Establishing2a2Framework2for2Investors

5. The2investment2professionals2that2arrange2the2sale2of2new2securities2ar
e2called:

a. arbitragers.
b. traders.
c. investment2bankers.
d. specialists.

Ans:2c
Difficulty:2Moderate
Ref:2The2Importance2of2Studying2Investments

6. Another2name2for2stockbrokers2is:

a. specialists.
b. financial2advisors.
c. security2analysts.
d. portfolio2managers.

Ans:2b
Difficulty:2Moderate
Ref:2The2Importance2of2Studying2Investments

7. Investment2professionals2who2take2companies2public,2arrange2mergers2an
d2acquisitions,2and2participate2in2municipal2bond2issues2are:

a. registered2representatives.
b. security2analysts.
c. investment2bankers.
d. portfolio2managers.

Ans:2c
Difficulty:2Moderate
Ref:2The2Importance2of2Studying2Investments

8. One2reason2for2the2declining2importance2of2pension2funds2is2the:

a. decrease2in2pension2benefits2for2workers.
b. downsizing2of2U.S.2companies.
c. large2number2of2conversions2into2self-directed2plans.
d. increasing2number2of2federal2regulations2that2restrict2pension2fund2portfolios.

Ans:2c
Difficulty:2Difficult
Ref:2The2Importance2of2Studying2Investments

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, 9. Most2financial2advisors2are2registered2with2the2Securities2and2Exchang
e2Commission2as:

a. registered2representatives.
b. registered2investment2advisors.
c. registered2financial2planners.
d. registered2securities2consultants.

Ans:2b
Difficulty:2Moderate
Ref:2The2Importance2of2Studying2Investments

10. A2Chartered2Financial2Analyst2designation2is2a(n)

a. SEC-approved2and2awarded2designation.
b. certification2of2a2successful2investing2record.
c. professional2designation2awarded2for2meeting2recognized2standards2of2conduc
t2and2competency.
d. professional2designation2awarded2by2the2brokerage2industry.

Ans:2c2Difficult
y:2Easy
Ref:2The2Importance2of2Studying2Investments

11. Underlying2all2investments2is2the2tradeoff2between:

a. expected2return2and2actual2return.
b. low2risk2and2high2risk.
c. actual2return2and2high2risk.
d. expected2return2and2risk.

Ans:2d
Difficulty:2Moderate
Ref:2Understanding2the2Investment2Decision2Process

12. Which2of2the2following2investment2areas2relies2heavily2on2mathematical2an
d2statistical2models?

a. Security2analysis
b. Portfolio2management
c. Institutional2investing
d. Retirement2planning

Ans:2b
Difficulty:2Moderate
Ref:2Understanding2the2Investment2Decision2Process

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