Chaminade Univ MBA 754 (Investment Mgmt) Week 1 – Ch 01 Homework (Graded)
Grade Details - All QuestionsQuestion 1. Question : Which of the following is an example of a tangible asset. Student Answer: Bonds mutual funds real estate stocks Question 2. Question : Tax planning Student Answer: 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. Question 3. Question : Land and buildings are examples of real property investments. Student Answer: True False Question 4. Question : Which of the following economic conditions is most difficult to identify: Student Answer: recovery expansion recession change in direction Question 5. Question : Chartered Financial Analyst (CFA) is a degree offered by several prestigious business schools. Student Answer: True False Question 6. Question : Since 1900, the average annual return on savings accounts has been higher than the return on stocks. Student Answer: True False 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 Student Answer: $3.00. $6.00. $(6.00). $9.00. Question 8. Question : A Unites States Savings Bond is an example of an investment as defined in the text. Student Answer: True False Question 9. Question : In the financial markets, individuals are net suppliers of funds. Student Answer: True False Question 10. Question : Table 1.4Use 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? Student Answer: $100 $150 $250 $280 Question 11. Question : You should spend money on housing, clothing and basic insurance before investing. Student Answer: True False Question 12. Question : A major goal of corporate financial management is to increase the value of the firm to investors. Student Answer: True False Question 13. Question : Almost half of Americans own stock or stock mutual funds. Student Answer: True False Question 14. Question : Short-term capital gains are taxed at the taxpayer's marginal tax rate. Student Answer: True False Question 15. Question : Institutional investors manage money for businesses and nonprofit organizations, but not for individuals. Student Answer: True False Question 16. Question : Bond prices rise as interest rates decline. Student Answer: True False Question 17. Question : Banks and insurance companies are examples of institutional investors. Student Answer: True False Question 18. Question : Stocks are a(n) ________ investment representing ________ of a business. Student Answer: direct; ownership direct; debt indirect; ownership indirect; debt Question 19. Question : The value of a derivative security is based on the value of an underlying security. Student Answer: True False Question 20. Question : Which of the following is an indirect investment? Student Answer: Stocks in foreign companies U.S. savings bonds Mutual funds Real estate Question 21. Question : Since 1900, the average annual return on savings accounts has been higher than the return on stocks. Student Answer: True False Question 22. Question : An option to purchase common stock is a type of equity security. Student Answer: True False Question 23. Question : Investment in a professionally managed pool of assets such as a mutual fund is an example of Student Answer: direct investment. indirect investment. derivative investment. speculative investment. Question 24. Question : An example of a direct investment is the purchase of mutual fund shares. Student Answer: True False Question 25. Question : Which one of the following would be the most liquid investment? Student Answer: stock Series EE bond money market mutual fund real estate 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? Student Answer: $0 $450 $840 $1,288 Question 27. Question : Mutual funds invest in diversified portfolios of securities. Student Answer: True False Question 28. Question : Speculation refers to high-risk investments which offer highly uncertain returns and future value. Student Answer: True False Question 29. Question : Which of the following represent investment goals? Student Answer: I and IV only I, III and IV only III and IV only II, III and IV Question 30. Question : Institutional investors are individuals who invest indirectly through financial institutions. Student Answer: True False