Exam (elaborations)
Test Bank Investments An Introduction 12th Edition
- Course
- Institution
Investments An Introduction 12th Edition BY Herbert - Test Bank Complete Test Bank with Questions Answers
[Show more]
Seller
Follow
premiumbiz379
Reviews received
Content preview
, Chapter 1 An Introduction to InvestmentsTRUE/FALSE
T 1. The investor should specify the objectives of
investing.
T 2. The terms "investing" and “trading” refer to
purchasing and selling securities.
T 3. Investments are made in anticipation of a return.
T 4. The anticipated return and the realized return often
differ.
F 5. Capital gains are the sole source of the return on an
investment.
T 6. Risk is the uncertainty that the realized return may
differ from the expected.
T 7. Stocks are initially sold in the “primary” market and
subsequently traded in the “secondary” market.
F 8. Liquidity refers to the ease of selling a stock for a
capital gain.
F 9. Efficient markets suggests that investors will
outperform the market consistently.
F 10. An informed investor can expect to consistently
outperform the market.
T 11. CFA is a professional designation for individuals
seeking positions as portfolio managers.
T 12. Portfolio assessment should include measures of both
risk and return.
,MULTIPLE CHOICE
d 1. Reasons for saving and investing include
1. need for funds to meet emergencies
2. retirement income
3. desire to leave an estate for children
a. 1 and 2
b. 1 and 3
c. 2 and 3
d. all of the above
a 2. Which of the following is an investment as defined
by an economist?
a. equipment
b. land
c. stock
d. savings account
a 3. Which of the following is not an investment in the
layperson's general use of the term?
a. equipment
b. land
c. stock
d. savings account
d 4. Many investments such as stock have common
characteristics including
1. existence of secondary markets
2. risk
3. potential for capital gains
a. 1 and 2
b. 1 and 3
c. 2 and 3
d. all of the above
d 5. Risk
a. depends solely on price fluctuations
b. should be maximized to increase returns
c. is reduced through specialization
d. refers to the uncertainty of returns
, b 6. Financial investments are made in efficient markets.
The existence of these markets suggests that
a. investors cannot earn superior returns
b. investors cannot expect to outperform the market
consistently
c. securies prices are random
d. bearing additional risk will not increase return
d 7. Diversification reduces
a. income
b. capital gains
c. taxes
d. risk
c 8. Trading implies
a. frequently buying securities
b. frequently selling securities
c. frequently buying and selling securities
d. investing
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller premiumbiz379. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $28.19. You're not tied to anything after your purchase.
Can Stuvia be trusted?
4.6 stars on Google & Trustpilot (+1000 reviews)
62890 documents were sold in the last 30 days
Founded in 2010, the go-to place to buy study notes for 14 years now