Chapter 11 True and False
A bankruptcy can stay on your credit report for up to 12 years
False
A corporate bond is a written pledge of a government or municipality to prepay a specified sum of money, along with interest
False
After you invest, it is important to let the investments manage themselves
False
An easy way to determine what percentage of your assets should be invested in growth investment is to take your age and subtract it from 80
False
An example of an inves4tment with high risk is a government bond
False
Government bonds have a higher potential investment return than stocks
False
If you are unable to make your credit card payments, you should not contact your credit card company
False
In the event of bankruptcy, stockholders have a claim to assets of the corporation before bondholders
False
Investments that ear a lower rate of interest will have a higher total dollar return than those that earn a high rate of interest
False
It isn't important to know how much you owe in order to survive a financial crisis
False
Short-term goals should be completed in 30 days or less
False
The usual face value of a corporate bond is $100
False
To investors, liquidity means their investments will increase in value
False
the potential return on any investment should be indirectly related to the risk the investor assumes
False
An investor can typically find more information about stocks and mutual funds online than they can find for bonds
True
An unemployment, single parent who just received a $300,000 divorce settlement would likely prefer income investments over growth investments
True
At the least, you should keep purchase records of the actual dollar cost of your investments including commisssions or feed paid
True
For many people, the easiest way to begin an investment program is to participate in an employer-sponsored 401(k) or 403(b) retirement account
True
In general, bond rating categories are similar to school grading scales with A being better than C
True
Intermediate goals should be accomplished in two to five years
True
Investment goals are always oriented to the future
True
Since 1926, stocks have earned an average annual return of just over 10 percent
True
The potential return of any investment should be directly related to the risk that the investor assumes
True
The price of oil stocks may change due to political unrest in the middle east
True
The prices of some investments may fluctuate because of periods of economic expansion followed by periods of recession
True
The purpose of diversification is to spread your assets among several different types of investments to decrease risk
True
To help survive a financial crisis, it is important to establish a larger than usual emergency fund
True
To investors, liquidity is the ability to buy or sell an investment quickly without substantially affecting the investment's value
True
Whether you are making your own decisions or have professional help, you must consider the tax consequences of selling your investments
True
Younger investors tend to invest in more aggressive portfolios than older investors
True
