Which of the following is an example of a tangible asset.

Bonds

mutual funds

real estate

stocks

Points Received: 1 of 1

Comments:

Question 2. Question : Tax planning

guides investment activities to maximize after-tax returns over the long term for an acceptable level of risk.

ignores the source of income and concentrates solely on the amount of income.

is primarily done by individuals with incomes below $200,000.

is limited to reviewing income for the current year and determining how to minimize current taxes.

Points Received: 1 of 1

Comments:

Question 3. Question : Land and buildings are examples of real property investments.

True

False

Points Received: 1 of 1

Comments:

Question 4. Question : Which of the following economic conditions is most difficult to identify:

recovery

expansion

recession

change in direction

Points Received: 1 of 1

Comments:

Question 5. Question : Chartered Financial Analyst (CFA) is a degree offered by several prestigious business schools.

True

False

Points Received: 1 of 1

Comments:

Question 6. Question : Since 1900, the average annual return on savings accounts has been higher than the return on stocks.

True

False

Points Received: 1 of 1

Comments:

Question 7. Question : Sarah purchased a stock one year ago at a price of $32 a share. In the past year, she has received four quarterly dividends of $0.75 each. Today she sold the stock for $38 a share. Her capital gain per share is

$3.00.

$6.00.

$(6.00).

$9.00.

Points Received: 1 of 1

Comments:

Question 8. Question : A Unites States Savings Bond is an example of an investment as defined in the text.

True

False

Points Received: 1 of 1

Comments:

Question 9. Question : In the financial markets, individuals are net suppliers of funds.

True

False

Points Received: 1 of 1

Comments:

Question 10. Question : Table 1.4

Use the following tax rates and income brackets to answer the following question(s).

John and Nicole earn a combined taxable income of $148,800 from employment and file a joint tax return. If they earn$1,000 in short-term capital gains, how much will they owe on those gains?

$100

$150

$250

$280

Points Received: 1 of 1

Comments:

Question 11. Question : You should spend money on housing, clothing and basic insurance before investing.

True

False

Points Received: 1 of 1

Comments:

Question 12. Question : A major goal of corporate financial management is to increase the value of the firm to investors.

True

False

Points Received: 1 of 1

Comments:

Question 13. Question : Almost half of Americans own stock or stock mutual funds.

True

False

Points Received: 1 of 1

Comments:

Question 14. Question : Short-term capital gains are taxed at the taxpayer's marginal tax rate.

True

False

Points Received: 1 of 1

Comments:

Question 15. Question : Institutional investors manage money for businesses and nonprofit organizations, but not for individuals.

True

False

Points Received: 1 of 1

Comments:

Question 16. Question : Bond prices rise as interest rates decline.

True

False

Points Received: 1 of 1

Comments:

Question 17. Question : Banks and insurance companies are examples of institutional investors.

True

False

Points Received: 1 of 1

Comments:

Question 18. Question : Stocks are a(n) ________ investment representing ________ of a business.

direct; ownership

direct; debt

indirect; ownership

indirect; debt

Points Received: 1 of 1

Comments:

Question 19. Question : The value of a derivative security is based on the value of an underlying security.

True

False

Points Received: 1 of 1

Comments:

Question 20. Question : Which of the following is an indirect investment?

Stocks in foreign companies

U.S. savings bonds

Mutual funds

Real estate

Points Received: 1 of 1

Comments:

Question 21. Question : Since 1900, the average annual return on savings accounts has been higher than the return on stocks.

True

False

Points Received: 1 of 1

Comments:

Question 22. Question : An option to purchase common stock is a type of equity security.

True

False

Points Received: 1 of 1

Comments:

Question 23. Question : Investment in a professionally managed pool of assets such as a mutual fund is an example of

direct investment.

indirect investment.

derivative investment.

speculative investment.

Points Received: 1 of 1

Comments:

Question 24. Question : An example of a direct investment is the purchase of mutual fund shares.

True

False

Points Received: 1 of 1

Comments:

Question 25. Question : Which one of the following would be the most liquid investment?

stock

Series EE bond

money market mutual fund

real estate

Points Received: 1 of 1

Comments:

Question 26. Question : Danielle and Jonathan are in the 28% marginal tax bracket. They bought 200 shares of DJN stock at $35 per share and sold them 4 years later at $12 per share? How much did their loss reduce their taxes in the year when they sold the stock?

$0

$450

$840

$1,288

Points Received: 1 of 1

Comments:

Question 27. Question : Mutual funds invest in diversified portfolios of securities.

True

False

Points Received: 1 of 1

Comments:

Question 28. Question : Speculation refers to high-risk investments which offer highly uncertain returns and future value.

True

False

Points Received: 1 of 1

Comments:

Question 29. Question : Which of the following represent investment goals?

I and IV only

I, III and IV only

III and IV only

II, III and IV

Points Received: 1 of 1

Comments:

Question 30. Question : Institutional investors are individuals who invest indirectly through financial institutions.

True

False

Points Received: 1 of 1

Comments:

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