Finance and Investment Cumulative Quiz

A certificate of indebtedness issued by a governmental body or a corporation is a:

Bond

What is a debt investments

Bonds

An investor invests money in expectation of a return on the investment. Depending on the type of investment, the return may be any of the following, except:

Depreciation

Which of the following is NOT true of market interest rates?

High market interest rates encourage refinancing

A lender receives a return on a mortgage loan in the form of:

Interest

Jenny has saved up $4,000 over the past year, and she'd like to invest the money. She's uncertain about the stability of her job, however, and she wants quick access to her money in the event that she's laid off. Jenny is primarily concerned about:

Liquidity

Mortgage loans are pooled together and sold on the secondary market as:

Mortgage-backed securities

Someone who buys an asset or a property interest in an asset is making a/an:

Ownership Investment

To protect the yields they expect from their loans, mortgage lenders sometimes charge a penalty for:

Prepayment

Which of these types of investments is the most illiquid?

Real estate

An investor who is interested in the amount of money an investment will produce is primarily concerned about the investment's:

Yields

The original principal amount of a mortgage loan is the:

amount of the lender's investment

One way an investor can minimize the likelihood of suffering serious losses on her investments is to:

maintain a diversified portfolio

Generally, the longer the loan term:

the higher the interest rate risk

A mortgage lender's risk of loss relates to:

the possibility that the proceeds from a foreclosure sale of the property wouldn't cover the loan balance

The face amount of a bond is the:

value of the bond at maturity

Gina bought her house 5 years ago for $250,000 and has made no improvements. She's decided to move to the country, so she puts the house up for sale. Todd buys it for $375,000. Gina's profit on the sale is the result of:

Appreciation

Mortgage lenders screen loan applicants to evaluate the:

Risk of default

Stocks and bonds are traded in specialized markets that are regulated by the:

Securities and Exchange Commission

Which of the following statements about securities is true?

Securities give the holder a property interest or a right to payment