Foundations of Investments, 2nd Edition Test Bank | Adair & Nofsinger (Multiple Choice Questions)

Test Bank - Foundations of Investments, 2nd Edition by Troy Adair, R. Nofsinger
Chapter 1 Introduction to Investments
Multiple Choice
1. Assets that either contribute to production or create income or wealth are
a. financial assets.
b. real assets.
c. diversified assets.
d. income assets.
ANSWER: b
POINTS: 1
DIFFICULTY: Easy
REFERENCES: Real vs. Financial Assets
QUESTION TYPE: Multiple Choice
LEARNING OBJECTIVES: INVEST.ADAI.27.01-01 - Describe the difference between real assets and financial assets.
NATIONAL STANDARDS: United States - BUSPROG: Analytic
KEYWORDS: Bloom's: Remember

2. A physical asset that has a value due to its substance and properties, such as precious metals, commodities, real estate,
land, equipment, and natural resources, is a
a. financial asset.
b. diversified asset.
c. capital gain.
d. real asset.
ANSWER: d
POINTS: 1
DIFFICULTY: Easy
REFERENCES: Real vs. Financial Assets
QUESTION TYPE: Multiple Choice
LEARNING OBJECTIVES: INVEST.ADAI.27.01-01 - Describe the difference between real assets and financial assets.
NATIONAL STANDARDS: United States - BUSPROG: Analytic
KEYWORDS: Bloom's: Remember

3. The copyright for a music composition is an example of a
a. financial asset.
b. diversified asset.
c. real asset.
d. capital gain.
ANSWER: c
POINTS: 1
DIFFICULTY: Easy
REFERENCES: Real vs. Financial Assets
QUESTION TYPE: Multiple Choice
LEARNING OBJECTIVES: INVEST.ADAI.27.01-01 - Describe the difference between real assets and financial assets.
NATIONAL STANDARDS: United States - BUSPROG: Analytic
KEYWORDS: Bloom's: Understand

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,Chapter 1 Introduction to Investments
4. A corporate stock is an example of a
a. financial asset.
b. diversified asset.
c. real asset.
d. capital gain.
ANSWER: a
POINTS: 1
DIFFICULTY: Easy
REFERENCES: Real vs. Financial Assets
QUESTION TYPE: Multiple Choice
LEARNING OBJECTIVES: INVEST.ADAI.27.01-01 - Describe the difference between real assets and financial assets.
NATIONAL STANDARDS: United States - BUSPROG: Analytic
KEYWORDS: Bloom's: Understand

5. A corporate bond is an example of a
a. diversified asset.
b. financial asset.
c. real asset.
d. capital gain.
ANSWER: b
POINTS: 1
DIFFICULTY: Easy
REFERENCES: Real vs. Financial Assets
QUESTION TYPE: Multiple Choice
LEARNING OBJECTIVES: INVEST.ADAI.27.01-01 - Describe the difference between real assets and financial assets.
NATIONAL STANDARDS: United States - BUSPROG: Analytic
KEYWORDS: Bloom's: Understand

6. Real assets are used to produce economic output, while what type of asset serves to allocate how that output is divided
up?
a. Diversified asset
b. Physical asset
c. Financial asset
d. Undiversified asset
ANSWER: c
POINTS: 1
DIFFICULTY: Easy
REFERENCES: Real vs. Financial Assets
QUESTION TYPE: Multiple Choice
LEARNING OBJECTIVES: INVEST.ADAI.27.01-01 - Describe the difference between real assets and financial assets.
NATIONAL STANDARDS: United States - BUSPROG: Analytic
KEYWORDS: Bloom's: Understand

7. GameStop has approximately 76,000,000 shares common stock outstanding as of May 2022. Each share has the same
value and rights as every other one. In this way, the asset is said to
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,Chapter 1 Introduction to Investments

a. lack volatility.
b. be stable in value.
c. be unique.
d. lack uniqueness.
ANSWER: d
POINTS: 1
DIFFICULTY: Easy
REFERENCES: Real vs. Financial Assets
QUESTION TYPE: Multiple Choice
LEARNING OBJECTIVES: INVEST.ADAI.27.01-01 - Describe the difference between real assets and financial assets.
NATIONAL STANDARDS: United States - BUSPROG: Analytic
KEYWORDS: Bloom's: Apply

8. Compared to financial assets, physical assets tend to be
a. less unique.
b. more unique.
c. more liquid.
d. higher in volume.
ANSWER: b
POINTS: 1
DIFFICULTY: Easy
REFERENCES: Real vs. Financial Assets
QUESTION TYPE: Multiple Choice
LEARNING OBJECTIVES: INVEST.ADAI.27.01-01 - Describe the difference between real assets and financial assets.
NATIONAL STANDARDS: United States - BUSPROG: Analytic
KEYWORDS: Bloom's: Understand

9. In the following diagram of a system of financial cash flows, from where does the initial investment come?




a. Government

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, Chapter 1 Introduction to Investments

b. Projects
c. Investors
d. Companies
ANSWER: c
POINTS: 1
DIFFICULTY: Moderate
REFERENCES: Cash Flows and the Sources of Uncertainty
QUESTION TYPE: Multiple Choice
LEARNING OBJECTIVES:INVEST.ADAI.27.01-02 - Explain the system of cash flows between companies, investors,
and the government.
NATIONAL STANDARDS: United States - BUSPROG: Analytic
KEYWORDS: Bloom's: Apply

10. In the following diagram of a system of financial cash flows, profits reinvested in the company are called




a. government.
b. retained earnings.
c. taxes.
d. projects.
ANSWER: b
POINTS: 1
DIFFICULTY: Moderate
REFERENCES: Cash Flows and the Sources of Uncertainty
QUESTION TYPE: Multiple Choice
LEARNING OBJECTIVES:INVEST.ADAI.27.01-02 - Explain the system of cash flows between companies, investors,
and the government.
NATIONAL STANDARDS: United States - BUSPROG: Analytic
KEYWORDS: Bloom's: Apply

11. In the following diagram of a system of financial cash flows, investment in projects comes from

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