,FundamentalsnofnInvesting,n13en(Smart)nChapt
ern1n ThenInvestmentnEnvironment
1.1 LearningnGoaln 1
1) A n non-
interest n bearingn checkingn account n isn stilln considered n ann investment.n Answer:n
FALSE
Learningn Outcome:n F-
12n Discussn then implicationsn of n systematicn riskn inn financialn marketsn and n itsn rolen inn shapingn investme
nt n choices
AACSB:n 3n Analyticaln thinkingn Questio
nnStatus:n PreviousnEditionn Learningn Go
al:n Learningn Goaln 1
2) Land n and nbuildingsn aren examplesn of n realn propertyninvestments.n
Answer:n TRUE
Learningn Outcome:n F-
12n Discussn then implicationsn of n systematicn riskn inn financialn marketsn and n itsn rolen inn shapingn investme
nt n choices
AACSB:n 3n Analyticaln thinkingn Questio
nnStatus:n PreviousnEditionn Learningn Go
al:n Learningn Goaln 1
3) Sincen 1900,n then averagen returnn onnstocksn hasnexceedednthenaveragen returnnonn savingsn a
ccountsn byn moren thann 6n percentagen points.
Answer:n TRUE
Learningn Outcome:n F-
12n Discussn then implicationsn of n systematicn riskn inn financialn marketsn and n itsn rolen inn shapingn investme
nt n choices
AACSB:n 3n Analyticaln thinkingn Questio
nnStatus:n PreviousnEditionn Learningn Go
al:n Learningn Goaln 1
4) A n United nStatesn Savingsn Bondnisn annexamplen of nann investment nasn defined n inn then text.n
Answer:n TRUE
Learningn Outcome:n F-
12n Discussn then implicationsn of n systematicn riskn inn financialn marketsn and n itsn rolen inn shapingn investme
nt n choices
AACSB:n 3n Analyticaln thinkingn Questio
nnStatus:n PreviousnEditionn Learningn Go
al:n Learningn Goaln 1
5) Most n sourcesn of n investment n informationnaren inn print nformat,n expensive,n andndifficult ntona
ccess.
Answer:n FALSE
Learningn Outcome:n F-
1
Copyright n©n 2017 n Pearson nEducation,nInc.
,12n Discussn then implicationsn of n systematicn riskn innfinancialn marketsn andn itsn rolen inn shapingn investm
ent n choices
AACSB:n 3n Analyticaln thinkingn
Questionn Status:n Newn Questionn
Learningn Goal:n Learningn Goaln 1
2
Copyright n©n 2017 n Pearson nEducation,nInc.
, 6) Whichn of n then followingn isn NOTn ann investment n asn defined n inn then text?
A) an certificaten of n deposit n issued n byn an bank
B) an new n automobile
C) an United n Statesn Savingn Bond
D) an mutualn fund nheldninn anretirement naccount n
Answer:n B
Learningn Outcome:n F-
12n Discussn then implicationsn of n systematicn riskn inn financialn marketsn and n itsn rolen inn shapingn investme
nt n choices
AACSB:n 3n Analyticaln thinkingn Questio
nnStatus:n PreviousnEditionn Learningn Go
al:n Learningn Goaln 1
7) Stocksn aren a(n)n investment n representingn of n an business.
A) direct;n ownership
B) direct;n debt
C) indirect;n ownership
D) indirect;ndebt
n Answer:n A
Learningn Outcome:n F-
12n Discussn then implicationsn of n systematicn riskn inn financialn marketsn and n itsn rolen inn shapingn investme
nt n choices
AACSB:n 3n Analyticaln thinkingn Questio
nnStatus:n PreviousnEditionn Learningn Go
al:n Learningn Goaln 1
8) Ann exchangen traded n fund n that n investsn inn then stocksn of n largen corporationsn isn ann examplen of
A) direct n investment.
B) indirect n investment.
C) derivativen investment.
D) tangiblen investment.
Answer:n B
Learningn Outcome:n F-
12n Discussn then implicationsn of n systematicn riskn inn financialn marketsn and n itsn rolen inn shapingn investme
nt n choices
AACSB:n 3n Analyticaln thinkingn Questio
nnStatus:n PreviousnEditionn Learningn Go
al:n Learningn Goaln 1
9) Whichn of n then followingn hasn declined n inn recent n years?
A) direct n ownershipn of n stockn byn individualn investors
B) then percentagen of n foreignn stocksn held n inn typicaln portfolios
C) institutionaln ownershipn of n commonn stocks
D) then timelinessn of n informationn availablen toninvestorsn
Answer:n A
Learningn Outcome:n F-
12n Discussn then implicationsn of n systematicn riskn inn financialn marketsn and n itsn rolen inn shapingn investme
3
Copyright n©n 2017 n Pearson nEducation,nInc.
ern1n ThenInvestmentnEnvironment
1.1 LearningnGoaln 1
1) A n non-
interest n bearingn checkingn account n isn stilln considered n ann investment.n Answer:n
FALSE
Learningn Outcome:n F-
12n Discussn then implicationsn of n systematicn riskn inn financialn marketsn and n itsn rolen inn shapingn investme
nt n choices
AACSB:n 3n Analyticaln thinkingn Questio
nnStatus:n PreviousnEditionn Learningn Go
al:n Learningn Goaln 1
2) Land n and nbuildingsn aren examplesn of n realn propertyninvestments.n
Answer:n TRUE
Learningn Outcome:n F-
12n Discussn then implicationsn of n systematicn riskn inn financialn marketsn and n itsn rolen inn shapingn investme
nt n choices
AACSB:n 3n Analyticaln thinkingn Questio
nnStatus:n PreviousnEditionn Learningn Go
al:n Learningn Goaln 1
3) Sincen 1900,n then averagen returnn onnstocksn hasnexceedednthenaveragen returnnonn savingsn a
ccountsn byn moren thann 6n percentagen points.
Answer:n TRUE
Learningn Outcome:n F-
12n Discussn then implicationsn of n systematicn riskn inn financialn marketsn and n itsn rolen inn shapingn investme
nt n choices
AACSB:n 3n Analyticaln thinkingn Questio
nnStatus:n PreviousnEditionn Learningn Go
al:n Learningn Goaln 1
4) A n United nStatesn Savingsn Bondnisn annexamplen of nann investment nasn defined n inn then text.n
Answer:n TRUE
Learningn Outcome:n F-
12n Discussn then implicationsn of n systematicn riskn inn financialn marketsn and n itsn rolen inn shapingn investme
nt n choices
AACSB:n 3n Analyticaln thinkingn Questio
nnStatus:n PreviousnEditionn Learningn Go
al:n Learningn Goaln 1
5) Most n sourcesn of n investment n informationnaren inn print nformat,n expensive,n andndifficult ntona
ccess.
Answer:n FALSE
Learningn Outcome:n F-
1
Copyright n©n 2017 n Pearson nEducation,nInc.
,12n Discussn then implicationsn of n systematicn riskn innfinancialn marketsn andn itsn rolen inn shapingn investm
ent n choices
AACSB:n 3n Analyticaln thinkingn
Questionn Status:n Newn Questionn
Learningn Goal:n Learningn Goaln 1
2
Copyright n©n 2017 n Pearson nEducation,nInc.
, 6) Whichn of n then followingn isn NOTn ann investment n asn defined n inn then text?
A) an certificaten of n deposit n issued n byn an bank
B) an new n automobile
C) an United n Statesn Savingn Bond
D) an mutualn fund nheldninn anretirement naccount n
Answer:n B
Learningn Outcome:n F-
12n Discussn then implicationsn of n systematicn riskn inn financialn marketsn and n itsn rolen inn shapingn investme
nt n choices
AACSB:n 3n Analyticaln thinkingn Questio
nnStatus:n PreviousnEditionn Learningn Go
al:n Learningn Goaln 1
7) Stocksn aren a(n)n investment n representingn of n an business.
A) direct;n ownership
B) direct;n debt
C) indirect;n ownership
D) indirect;ndebt
n Answer:n A
Learningn Outcome:n F-
12n Discussn then implicationsn of n systematicn riskn inn financialn marketsn and n itsn rolen inn shapingn investme
nt n choices
AACSB:n 3n Analyticaln thinkingn Questio
nnStatus:n PreviousnEditionn Learningn Go
al:n Learningn Goaln 1
8) Ann exchangen traded n fund n that n investsn inn then stocksn of n largen corporationsn isn ann examplen of
A) direct n investment.
B) indirect n investment.
C) derivativen investment.
D) tangiblen investment.
Answer:n B
Learningn Outcome:n F-
12n Discussn then implicationsn of n systematicn riskn inn financialn marketsn and n itsn rolen inn shapingn investme
nt n choices
AACSB:n 3n Analyticaln thinkingn Questio
nnStatus:n PreviousnEditionn Learningn Go
al:n Learningn Goaln 1
9) Whichn of n then followingn hasn declined n inn recent n years?
A) direct n ownershipn of n stockn byn individualn investors
B) then percentagen of n foreignn stocksn held n inn typicaln portfolios
C) institutionaln ownershipn of n commonn stocks
D) then timelinessn of n informationn availablen toninvestorsn
Answer:n A
Learningn Outcome:n F-
12n Discussn then implicationsn of n systematicn riskn inn financialn marketsn and n itsn rolen inn shapingn investme
3
Copyright n©n 2017 n Pearson nEducation,nInc.
