Charles P Jones Test

Investments Analysis and Management 14e Charles P Jones (Test Bank All Chapters, 100% Original Verified, A+ Grade) Part 1: Exam Test Bank: 1-362 Part 2: Student Practice Quizes: 363-542 1 / 4

Chapter 1: Understanding Investments

Multiple Choice

• Which of the following is the best definition of wealth?
• The sum of all current and future income
• The total of all assets and all income
• The total of assets and income less any liabilities
• The sum of current income and the present value of future income

Ans: d

Difficulty: Moderate

Ref: Establishing a Framework for Investors

2. Gold coins would be classified as:

• real assets.
• indirect assets.
• personal assets.
• financial assets.

Ans: a

Difficulty: Easy

Ref: Establishing a Framework for Investors

3. Technically, investments include:

• only financial assets.
• only marketable assets.
• financial and real assets that are marketable or non-marketable.
• only financial and real assets that are marketable.

Ans: c

Difficulty: Easy

Ref: Establishing a Framework for Investors

• Retirement plans that guarantee a set amount of money each month are known as:
• 401(k) plans.
• self-directed plans.
• defined-benefit plans.
• defined-contribution plans.

Ans: c

Difficulty: Moderate

Ref: Establishing a Framework for Investors

Chapter One Understanding Investments 1

Test Bank Part 1: Exam Test Bank 2 / 4

• The investment professionals that arrange the sale of new securities are

called:

• arbitragers.
• traders.
• investment bankers.
• specialists.

Ans: c

Difficulty: Moderate

Ref: The Importance of Studying Investments

6. Another name for stockbrokers is:

• specialists.
• financial advisors.
• security analysts.
• portfolio managers.

Ans: b

Difficulty: Moderate

Ref: The Importance of Studying Investments

• Investment professionals who take companies public, arrange mergers and

acquisitions, and participate in municipal bond issues are:

• registered representatives.
• security analysts.
• investment bankers.
• portfolio managers.

Ans: c

Difficulty: Moderate

Ref: The Importance of Studying Investments

8. One reason for the declining importance of pension funds is the:

• decrease in pension benefits for workers.
• downsizing of U.S. companies.
• large number of conversions into self-directed plans.
• increasing number of federal regulations that restrict pension fund portfolios.

Ans: c

Difficulty: Difficult

Ref: The Importance of Studying Investments

Chapter One Understanding Investments

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• Most financial advisors are registered with the Securities and Exchange

Commission as:

• registered representatives.
• registered investment advisors.
• registered financial planners.
• registered securities consultants.

Ans: b

Difficulty: Moderate

Ref: The Importance of Studying Investments

10.A Chartered Financial Analyst designation is a(n)

• SEC-approved and awarded designation.
• certification of a successful investing record.
• professional designation awarded for meeting recognized standards of conduct

and competency.

• professional designation awarded by the brokerage industry.

Ans: c

Difficulty: Easy

Ref: The Importance of Studying Investments

11.Underlying all investments is the tradeoff between:

• expected return and actual return.
• low risk and high risk.
• actual return and high risk.
• expected return and risk.

Ans: d

Difficulty: Moderate

Ref: Understanding the Investment Decision Process

12.Which of the following investment areas relies heavily on mathematical and statistical models?

• Security analysis
• Portfolio management
• Institutional investing
• Retirement planning

Ans: b

Difficulty: Moderate

Ref: Understanding the Investment Decision Process

Chapter One Understanding Investments

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