Chapter 01 t
Investments: Background and Issues
t t t
t
MultipletChoicetQuestions
t
1. Financialtassetstrepresentt_____tofttotaltassetstoftU.S.thouseholds.t
t
A.tovert60%
B.tovert90%
C.tundert10%
D.taboutt30%
t
2. Realtassetstinttheteconomytincludetalltbuttwhichtonetoftthetfollowing?t
t
A.tLand
B.tBuildings
C.tConsumertdurables
D.tCommontstock
t
3. Nettworthtrepresentst_____toftthetliabilitiestandtnettworthtoftcommercialtbanks.t
t
A.taboutt51%
B.taboutt91%
C.taboutt11%
D.taboutt31%
t
4 AccordingttotthetFlowtoftFundstAccountstoftthetUnitedtStates,tthetlargesttsingletassettoftU.S.thouseholdst
. ist___.t
t
A.tmutualtfundtshares
B.trealtestate
C.tpensiontreserves
D.tcorporatetequity
t
©t2013tbytMcGraw-
HilltEducation.ttThististproprietarytmaterialtsolelytfortauthorizedtinstructortuse.tNottauthorizedtfortsaletortdistributio
ntintanytmanner.ttThistdocumenttmaytnottbetcopied,tscanned,tduplicated,tforwarded,tdistributed,tortpostedtontatwebsi
te,tintwholetortpart.
,5 AccordingttotthetFlowtoftFundstAccountstoftthetUnitedtStates,tthetlargesttliabilitytoftU.S.thouseholdstist__
. ______.t
t
A.tmortgages
B.tconsumertcredit
C.tbanktloans
D.tgamblingtdebts
t
6. ____tistnottatderivativetsecurity.t
t
A.tAtsharetoftcommontstock
B.tAtcalltoption
C.tAtfuturestcontract
D.tNonetoftthesetoptionst(Alltoftthetanswerstaretderivativetsecurities.)
t
7 AccordingttotthetFlowtoftFundstAccountstoftthetUnitedtStates,tthetlargesttfinancialtassettoftU.S.thousehol
. dstist____.t
t
A.tmutualtfundtshares
B.tcorporatetequity
C.tpensiontreserves
D.tpersonalttrusts
t
8. Activettradingtintmarketstandtcompetitiontamongtsecuritiestanalyststhelpstensuretthat:
I.tSecuritytpricestapproachtinformationaltefficiency
II.tRiskiertsecuritiestaretpricedttotofferthighertpotentialtreturns
III.tInvestorstaretunlikelyttotbetablettotconsistentlytfindtunder-tortovervaluedtsecuritiest
t
A.tItonly
B.tItandtIItonly
C.tIItandtIIItonly
D.tI,tII,tandtIII
t
©t2013tbytMcGraw-
HilltEducation.ttThististproprietarytmaterialtsolelytfortauthorizedtinstructortuse.tNottauthorizedtfortsaletortdistributio
ntintanytmanner.ttThistdocumenttmaytnottbetcopied,tscanned,tduplicated,tforwarded,tdistributed,tortpostedtontatwebsi
te,tintwholetortpart.
,9 Thetmaterialtwealthtoftsocietytistdeterminedtbyttheteconomy'st_________,twhichtistatfunctiontoftthetecono
. my'st_________.t
t
A.tinvestmenttbankers;tfinancialtassets
B.tinvestmenttbankers;trealtassets
C.tproductivetcapacity;tfinancialtassets
D.tproductivetcapacity;trealtassets
t
10. Whichtoftthetfollowingtistnottatmoneytmarkettsecurity?t
t
A.tU.S.tTreasurytbill
B.t6-monthtmaturitytcertificatetoftdeposit
C.tCommontstock
D.tBankers'tacceptance
t
11 __________tassetstgeneratetnettincomettottheteconomy,tandt__________tassetstdefinetallocationtoftinco
. metamongtinvestors.t
t
A.tFinancial,tfinancial
B.tFinancial,treal
C.tReal,tfinancial
D.tReal,treal
t
12. Whichtoftthetfollowingtaretfinancialtassets?
I.tDebttsecurities
II.tEquitytsecurities
III.tDerivativetsecuritiest
t
A.tItonly
B.tItandtIItonly
C.tIItandtIIItonly
D.tI,tII,tandtIII
t
©t2013tbytMcGraw-
HilltEducation.ttThististproprietarytmaterialtsolelytfortauthorizedtinstructortuse.tNottauthorizedtfortsaletortdistributio
ntintanytmanner.ttThistdocumenttmaytnottbetcopied,tscanned,tduplicated,tforwarded,tdistributed,tortpostedtontatwebsi
te,tintwholetortpart.
, 13. __________taretexamplestoftfinancialtintermediaries.t
t
A.tCommercialtbanks
B.tInsurancetcompanies
C.tInvestmenttcompanies
D.tAlltoftthesetoptions
t
14. Assettallocationtrefersttot_________.t
t
A.tthetallocationtoftthetinvestmenttportfoliotacrosstbroadtassettclasses
B.tthetanalysistoftthetvaluetoftsecurities
C.tthetchoicetoftspecifictassetstwithinteachtassettclass
D.tnonetoftthesetoptions
t
15. Whichtonetoftthetfollowingtbesttdescribestthetpurposetoftderivativestmarkets?t
t
A.tTransferringtrisktfromtonetpartyttotanother
B.tInvestingtfortatshortttimetperiodttotearntatsmalltratetoftreturn
C.tInvestingtfortretirement
D.tEarningtinteresttincome
t
16. Moretthant_____________toftcurrencytisttradedteachtdaytintthetmarkettfortforeigntexchange.t
t
A.t$300tmillion
B.t$1tbillion
C.t$30tbillion
D.t$1ttrillion
t
17. Securitytselectiontrefersttotthet________.t
t
A.tallocationtoftthetinvestmenttportfoliotacrosstbroadtassettclasses
B.tanalysistoftthetvaluetoftsecurities
C.tchoicetoftspecifictsecuritiestwithinteachtassettclass
D.ttop-downtmethodtoftinvesting
t
©t2013tbytMcGraw-
HilltEducation.ttThististproprietarytmaterialtsolelytfortauthorizedtinstructortuse.tNottauthorizedtfortsaletortdistributio
ntintanytmanner.ttThistdocumenttmaytnottbetcopied,tscanned,tduplicated,tforwarded,tdistributed,tortpostedtontatwebsi
te,tintwholetortpart.
Investments: Background and Issues
t t t
t
MultipletChoicetQuestions
t
1. Financialtassetstrepresentt_____tofttotaltassetstoftU.S.thouseholds.t
t
A.tovert60%
B.tovert90%
C.tundert10%
D.taboutt30%
t
2. Realtassetstinttheteconomytincludetalltbuttwhichtonetoftthetfollowing?t
t
A.tLand
B.tBuildings
C.tConsumertdurables
D.tCommontstock
t
3. Nettworthtrepresentst_____toftthetliabilitiestandtnettworthtoftcommercialtbanks.t
t
A.taboutt51%
B.taboutt91%
C.taboutt11%
D.taboutt31%
t
4 AccordingttotthetFlowtoftFundstAccountstoftthetUnitedtStates,tthetlargesttsingletassettoftU.S.thouseholdst
. ist___.t
t
A.tmutualtfundtshares
B.trealtestate
C.tpensiontreserves
D.tcorporatetequity
t
©t2013tbytMcGraw-
HilltEducation.ttThististproprietarytmaterialtsolelytfortauthorizedtinstructortuse.tNottauthorizedtfortsaletortdistributio
ntintanytmanner.ttThistdocumenttmaytnottbetcopied,tscanned,tduplicated,tforwarded,tdistributed,tortpostedtontatwebsi
te,tintwholetortpart.
,5 AccordingttotthetFlowtoftFundstAccountstoftthetUnitedtStates,tthetlargesttliabilitytoftU.S.thouseholdstist__
. ______.t
t
A.tmortgages
B.tconsumertcredit
C.tbanktloans
D.tgamblingtdebts
t
6. ____tistnottatderivativetsecurity.t
t
A.tAtsharetoftcommontstock
B.tAtcalltoption
C.tAtfuturestcontract
D.tNonetoftthesetoptionst(Alltoftthetanswerstaretderivativetsecurities.)
t
7 AccordingttotthetFlowtoftFundstAccountstoftthetUnitedtStates,tthetlargesttfinancialtassettoftU.S.thousehol
. dstist____.t
t
A.tmutualtfundtshares
B.tcorporatetequity
C.tpensiontreserves
D.tpersonalttrusts
t
8. Activettradingtintmarketstandtcompetitiontamongtsecuritiestanalyststhelpstensuretthat:
I.tSecuritytpricestapproachtinformationaltefficiency
II.tRiskiertsecuritiestaretpricedttotofferthighertpotentialtreturns
III.tInvestorstaretunlikelyttotbetablettotconsistentlytfindtunder-tortovervaluedtsecuritiest
t
A.tItonly
B.tItandtIItonly
C.tIItandtIIItonly
D.tI,tII,tandtIII
t
©t2013tbytMcGraw-
HilltEducation.ttThististproprietarytmaterialtsolelytfortauthorizedtinstructortuse.tNottauthorizedtfortsaletortdistributio
ntintanytmanner.ttThistdocumenttmaytnottbetcopied,tscanned,tduplicated,tforwarded,tdistributed,tortpostedtontatwebsi
te,tintwholetortpart.
,9 Thetmaterialtwealthtoftsocietytistdeterminedtbyttheteconomy'st_________,twhichtistatfunctiontoftthetecono
. my'st_________.t
t
A.tinvestmenttbankers;tfinancialtassets
B.tinvestmenttbankers;trealtassets
C.tproductivetcapacity;tfinancialtassets
D.tproductivetcapacity;trealtassets
t
10. Whichtoftthetfollowingtistnottatmoneytmarkettsecurity?t
t
A.tU.S.tTreasurytbill
B.t6-monthtmaturitytcertificatetoftdeposit
C.tCommontstock
D.tBankers'tacceptance
t
11 __________tassetstgeneratetnettincomettottheteconomy,tandt__________tassetstdefinetallocationtoftinco
. metamongtinvestors.t
t
A.tFinancial,tfinancial
B.tFinancial,treal
C.tReal,tfinancial
D.tReal,treal
t
12. Whichtoftthetfollowingtaretfinancialtassets?
I.tDebttsecurities
II.tEquitytsecurities
III.tDerivativetsecuritiest
t
A.tItonly
B.tItandtIItonly
C.tIItandtIIItonly
D.tI,tII,tandtIII
t
©t2013tbytMcGraw-
HilltEducation.ttThististproprietarytmaterialtsolelytfortauthorizedtinstructortuse.tNottauthorizedtfortsaletortdistributio
ntintanytmanner.ttThistdocumenttmaytnottbetcopied,tscanned,tduplicated,tforwarded,tdistributed,tortpostedtontatwebsi
te,tintwholetortpart.
, 13. __________taretexamplestoftfinancialtintermediaries.t
t
A.tCommercialtbanks
B.tInsurancetcompanies
C.tInvestmenttcompanies
D.tAlltoftthesetoptions
t
14. Assettallocationtrefersttot_________.t
t
A.tthetallocationtoftthetinvestmenttportfoliotacrosstbroadtassettclasses
B.tthetanalysistoftthetvaluetoftsecurities
C.tthetchoicetoftspecifictassetstwithinteachtassettclass
D.tnonetoftthesetoptions
t
15. Whichtonetoftthetfollowingtbesttdescribestthetpurposetoftderivativestmarkets?t
t
A.tTransferringtrisktfromtonetpartyttotanother
B.tInvestingtfortatshortttimetperiodttotearntatsmalltratetoftreturn
C.tInvestingtfortretirement
D.tEarningtinteresttincome
t
16. Moretthant_____________toftcurrencytisttradedteachtdaytintthetmarkettfortforeigntexchange.t
t
A.t$300tmillion
B.t$1tbillion
C.t$30tbillion
D.t$1ttrillion
t
17. Securitytselectiontrefersttotthet________.t
t
A.tallocationtoftthetinvestmenttportfoliotacrosstbroadtassettclasses
B.tanalysistoftthetvaluetoftsecurities
C.tchoicetoftspecifictsecuritiestwithinteachtassettclass
D.ttop-downtmethodtoftinvesting
t
©t2013tbytMcGraw-
HilltEducation.ttThististproprietarytmaterialtsolelytfortauthorizedtinstructortuse.tNottauthorizedtfortsaletortdistributio
ntintanytmanner.ttThistdocumenttmaytnottbetcopied,tscanned,tduplicated,tforwarded,tdistributed,tortpostedtontatwebsi
te,tintwholetortpart.
