Question
1... Typical asset classes used for diversification include all of the following except and why? A) Bonds B) Foreign stocks C) Credit cards D) Small
1... Typical asset classes used for diversification include all of the following except and why?
A) Bonds
B) Foreign stocks
C) Credit cards
D) Small cap stocks
E) Midcap stocks
2... Which of the following is not true of mutual funds?
A) Mutual funds range from very conservative to extremely speculative investments.
B) They do not offer diversification. C) They can be used for retirement accounts. D) This investment provides professional management. E) A mutual fund pools the money from many investors.
3... Which type of risk affects only a specific company or a specific industry?
A) Interest rate B) Systematic C) Unsystematic
D) Economic
E) Inflation
4...
Which one of the following is not a recommended step individuals can use to withstand an economic downturn? A) Establish a smaller than usual emergency fund B) Consider converting investments to cash to preserve value
C) Notify lenders and credit card companies if you are unable to make payments
D) Reduce spending E) Monitor the value of your investment and retirement accounts
5... For an investor who wants to be conservative, which of the following investments would not be appropriate? A) U.S. government bonds B) Coins and stamps
C) U.S. securities D) CDs E) Conservative mutual funds
6.
Hugh Jackson is thinking about buying an investment. The investment option that he is thinking about buying is an investment where investors pool their money. One of the key features is that it is managed by professional managers. What investment is Hugh thinking about purchasing?
A) Common stock
B) Preferred stock
C) Corporate bond
D) Real estate
E) Mutual fund
Explain why
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