FIN 101 Final Exam Study Guide
Questions and Answers Graded A+
When you own stock in a company, you are: - Correct answer-Entitled to a share of
the firm's profits.
Which of the following is true if Ruth purchases 75 shares of an IPO for $30 per
share and sells the shares for $45 each? - Correct answer-She will have a $1125
capital gain.
Which of the following refers to ownership in a company? - Correct answer-Stock.
Which of the following refers to the first time privately held stock is made
available to the public? - Correct answer-Initial public offering (IPO).
Which of the following is/are reasons why investors might choose to invest in
mutual funds? - Correct answer-Diversification, professional management, and to
pool capital with other investors.
Which of the following best describes an index mutual fund? - Correct answer-
Passively managed funds designed to mimic a specific market.
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, A mutual fund's expense ratio is a: - Correct answer-measure of the total
management fees and expenses charged to the mutual fund annually.
As a novice investor, Laura is concerned about fees. She has heard stories of
investors who have lost thousands of dollars in fees over time. She wants to invest
in investments that generally have the lowest fees. Given her desire, Laura should
focus on purchasing: - Correct answer-Both index mutual funds and exchange-
traded funds.
Ramos is an aggressive investor and likes to win at everything. He knows that it is
impossible to win or beat the averages all of the time, but he wants to try! Given
his attitude, Ramos should select what type of investment if his number one goal is
to beat the market? - Correct answer-Actively managed mutual fund.
Diversification refers to: - Correct answer-Spreading your money among various
investments to reduce the impact of losses on a few investments.
An advantage of investing internationally is: - Correct answer-Low correlation
between U.S. stocks and international stock which reduces investment risk.
Given a high tolerance for risk and a desire to invest internationally, investment in
which type of countries could represent good investment opportunities? - Correct
answer-Countries with strong GDP growth, oversight, and legal structure.
©COPYRIGHT 2025, ALL RIGHTS RESERVED 2
Questions and Answers Graded A+
When you own stock in a company, you are: - Correct answer-Entitled to a share of
the firm's profits.
Which of the following is true if Ruth purchases 75 shares of an IPO for $30 per
share and sells the shares for $45 each? - Correct answer-She will have a $1125
capital gain.
Which of the following refers to ownership in a company? - Correct answer-Stock.
Which of the following refers to the first time privately held stock is made
available to the public? - Correct answer-Initial public offering (IPO).
Which of the following is/are reasons why investors might choose to invest in
mutual funds? - Correct answer-Diversification, professional management, and to
pool capital with other investors.
Which of the following best describes an index mutual fund? - Correct answer-
Passively managed funds designed to mimic a specific market.
©COPYRIGHT 2025, ALL RIGHTS RESERVED 1
, A mutual fund's expense ratio is a: - Correct answer-measure of the total
management fees and expenses charged to the mutual fund annually.
As a novice investor, Laura is concerned about fees. She has heard stories of
investors who have lost thousands of dollars in fees over time. She wants to invest
in investments that generally have the lowest fees. Given her desire, Laura should
focus on purchasing: - Correct answer-Both index mutual funds and exchange-
traded funds.
Ramos is an aggressive investor and likes to win at everything. He knows that it is
impossible to win or beat the averages all of the time, but he wants to try! Given
his attitude, Ramos should select what type of investment if his number one goal is
to beat the market? - Correct answer-Actively managed mutual fund.
Diversification refers to: - Correct answer-Spreading your money among various
investments to reduce the impact of losses on a few investments.
An advantage of investing internationally is: - Correct answer-Low correlation
between U.S. stocks and international stock which reduces investment risk.
Given a high tolerance for risk and a desire to invest internationally, investment in
which type of countries could represent good investment opportunities? - Correct
answer-Countries with strong GDP growth, oversight, and legal structure.
©COPYRIGHT 2025, ALL RIGHTS RESERVED 2
