mba tests midterm

With a lending investment, investors do which of the following:

Allow borrowers to use their money for a price

Which of the following is not a benefit of investing in bonds:

Bringing you high returns

Of the following ownership investments, which involves owning items that gain or lose value over time:

Collectibles

Which type of stock comes with voting rights?

Common

Which of the following is not a loan to a governing body:

Corporate bond

Teri decided to invest in a few different mutual funds rather than put all her investment dollars into one or two individual stocks. A stock in one of her mutual funds went bust, but since her money was spread out, Teri wasn't significantly affected. What advantage of mutual funds does Teri's situation illustrate?

Diversification

Non-profit organizations often pool and invest donated money in

Endowment funds

Which of the following is the best place to buy shares in a mutual fund:

Fidelity Investments

Which of the following most accurately describes the relationship between risk and return:

For the potential of a high return, you usually accept a high risk.

Which of the following is considered a reliable bond:

Government

Which of the following is a disadvantage of owning stock:

High degree of risk

Which of the following best describes the relationship between bonds and the stock market:

Inverse

Which of the following is an example of a real estate investment:

Land to be developed in the future

Which of the following best describes a marketable bond:

One that is bought and sold in the open market

With an ownership investment, investors do which of the following:

Pay for the right to own something

Of the following ownership investments, which allows access to an "expert" manager:

Stock mutual funds

Which of the following is not an important variable of a bond fund:

The amount of time you spend researching the bonds in the fund

Kent wants to learn as much as possible about the mutual fund he's thinking of investing in. Which of the following is the best place he could go for detailed information

The fund's prospectus

Which of the following is a disadvantage of investing in a savings account:

The rate of return doesn't keep up with inflation.

Which of the following is an advantage of investing in bonds:

They are very low risk.

Which of the following is not a reason that companies issue stock:

To gain respect

Which type of stock is considered a "bargain"?

Value

Which of the following is an advantage of a money market account over a savings account:

You can often write checks from a money market account

Which of the following is an advantage of a money market account over a savings account:

You can often write checks from a money market account.

Which of the following is a true statement about certificates of deposit:

You must pay a penalty for withdrawing your money early

Which of the following is a true statement about certificates of deposit:

You must pay a penalty for withdrawing your money early.

Jamie owned 300 shares of stock in a certain company, worth $10 per share. Then, the company announced that his 300 shares would become 600 shares, worth $5 per share. This is an illustration of

a stock split.

Mutual funds that contain both stocks and bonds are known as

balanced funds.

When Janine wants to know what others are willing to pay for a bond she owns, she looks at the

bid price.

Darron is investigating a few corporate bonds for investment. He wants to know how likely it is that the corporations will pay back what they've borrowed. Darron needs to look at the

bond rating.

Robyn bought $100 worth of stock in a company, and now it's worth $150. This is an illustration of

capital appreciation.

Since John wants to know the bond's interest rate, he needs to look at the bond's

coupon.

Because stocks in pharmaceutical companies hold their value regardless of the state of the economy, they are known as __________ stocks.

defensive

The biggest risk to a real estate investment is

depreciation

A company that Marcus invested in has earned a profit, and now Marcus is receiving a cash payment. This is an illustration of

dividends.

The ownership investment with the greatest risk of personal loss is

entrepreneurship

"Spiders" and "cubes" are types of

exchange-traded funds.

Which of the following is a factor that determines how much investment risk a person can handle:

goals

Melinda wants to invest in a bond, but her main concern is how soon she'll be able to access the money she's invested. Melinda needs to look at the

liquidity.

Commission fees associated with mutual funds are known as

loads.

The price of a mutual fund's shares is determined by

net asset value.

The purpose of the risk pyramid is to show a comparison of

one investment to another.

A mutual fund that has no limit on the number of shares it can issue or the amount of money it can hold is called a(n

open-end fund.

A stock with a price of $1 or less is known as a __________ stock.

penny

Investors take a risk for the potential of receiving which of the following:

return

Ownership investments are ideal for investors who are

risk-tolerant.

A place where investors can trade securities that have been issued by a corporation is known as a(n)

secondary market

In investing, legal lending or owning agreements between individuals, businesses, or governments are known as

securities

In investing, legal lending or owning agreements between individuals, businesses, or governments are known as

securities.

To get a general idea of the direction of the stock market today, check a

stock market index.

Businesses usually invest in

themselves

A fund that invests in stocks that tend to be undervalued or overlooked is called a

value fund.

What a bond brings you over a period of time at a particular price is called the bond's

yield.