A comprehensive budget may include any of the following components EXCEPT __________.

Select one:

a. a specialized budget.

b. a tax budget.

c. a cash flow statement.

d. an operating budget.

e. a capital budget.

Question 18

Investment risks include all the following EXCEPT __________.

Select one:

a. default risks.

b. economic risks.

c. industry and company risks.

d. asset class risks

e. market risks.

Question 19

A kind of annuity that consists of cash flows of equal amounts occurring at regular intervals and that continues indefinitely is __________.

Select one:

a. a perpetuity.

b. the rate of compounding.

c. interest from bonds.

d. the minimum value kind.

e. the time value of money.

Question 20

Giving someone the unlimited right to make legal and financial decisions on your behalf is __________.

Select one:

a. a testamentary trust.

b. naming an executor.

c. durable power of attorney.

d. a stated dollar amount will.

e. a health care proxy.

Question 21

A fund of real estate holdings that can be privately held or publicly traded on an exchange is a __________.

Select one:

a. syndicate.

b. limited partnership.

c. real estate investment trust.

d. direct investment fund.

e. mortgage-backed fund.

Question 22

Recession and inflation have decreased the value of your investments. This is an example of __________.

Select one:

a. economic risk.

b. industry risk.

c. company risk.

d. asset class risk.

e. market risk.

Question 23

Examples of annuities include all the following EXCEPT __________.

Select one:

a. savings plans.

b. layaway purchases.

c. mortgages.

d. one-time cash flows.

e. retirement plan payouts.

Question 24

A period of declining productivity lasting less than half a year is called __________.

Select one:

a. the gross domestic product.

b. a depression.

c. a recession.

d. an expansion.

e. a contraction

Question 25

An investment policy statement outlines __________.

Select one:

a. an investors return objectives, risk preferences, and constraints.

b. an investment advisors approach to applying portfolio theory.

c. an institutions goals and investment decisions.

d. an investment firms disclosures to clients.

e. a companys disclosures to investors.

Question 26

The time value of money is an important concept in __________.

Select one:

a. determining the frequency of cash flows.?

b. valuing a series of future cash flows.

c. predicting discount rates.

d. adding the number of cash flows.

e. identifying the amount of cash flows.

Question 27

You insure your dependents against financial hardship after your death through __________.

Select one:

a. estate taxes.

b. long-term disability insurance.

c. life insurance.

d. a flexible savings account.

e. private mortgage insurance.

Question 28

The costs of leasing are __________.

Select one:

a. the down payment

b. the lease payments.

c. the buyout.

d. a. and b.

e. a., b., and c.?

Question 29

Your risk tolerance represents __________.

Select one:

a. your wealth or net worth.

b. the amount of money you stand to lose.

c. your ability or willingness to take chances.

d. the amount of time separating you from your money.

e. your return objective.

Question 30

A budget for short-term goals involving recurring items is called a/an __________.

Select one:

a. operating budget.

b. comprehensive budget.

c. capital budget.

d. a. and b.

e. a., b., and c.

Question 31

The purpose of pro forma financial statements is to show __________.

Select one:

a. projected future value.

b. consequences of choices.

c. scenarios for financial planning.

d. a. and b.

e. a., b., and c.

Question 32

The relationship between the passage of time and the value of assets is called __________.

Select one:

a. the time value of money.

b. liquidity.

c. present value.

d. future value.

e. nominative value.

Question 33

In performing an attribute analysis you compare products in terms of __________.

Select one:

a. their demand or popularity and resale value.

b. the characteristics most important to you.-

c. price and the cost of maintenance or repair.

d. the transaction costs in relation to quality.

e. their appearance and performance.

Question 34

The stocks in Waynes investment portfolio lost value in the recession, but he also had CDs and a savings account. The effect of his investment diversification on his finances was to __________.

Select one:

a. increase spending.

b. reduce risk.

c. increase income.

d. reduce cost.

e. increase variety.

Question 35

Hazards covered by the homeowners policy include all the following EXCEPT __________.

Select one:

a. explosions.

b. floods and earthquakes.

c. riots.

d. smoke damage.

e. damage caused by aircraft or vehicles.

Question 36

A mortgage in which you borrow a monthly income via a loan against your home equity that you dont have to pay back for as long as you live there is called a/an __________.

Select one:

a. reverse mortgage.

b. balloon mortgage.

c. home equity loan.

d. adjustable rate mortgage.

e. fixed rate mortgage.

Question 37

To avoid unwelcome adjustments, you should __________.

Select one:

a. be conservative in your expectations.

b. stick with long-term goals.

c. redo your budget each week.

d. switch to less desirable choices.

Question 38

An effect of deflation is that your money __________.

Select one:

a. is worth more and buys more.

b. is worth less and buys less.

c. has less purchasing power.

d. is less useful as a medium of exchange.

e. is more stable.

Question 39

Which life stage typically is best characterized by the following financial circumstances: career building, family building, increased earning, increased spending, asset accumulation, desire to protect dependents and assets, decrease in willingness to assume risk?

Select one:

a. Adolescence

b. Early adulthood

c. Middle adulthood

d. Late adulthood?

e. Old Age

Question 40

Buying stocks or corporate or government bonds is a way to invest in __________.

Select one:

a. the capital market.

b. the credit market.

c. the labor market.

d. the buyers market.

e. the sellers market.