Indicate the answer choice that best completes the statement or answers the question.

Name: Class: Date: Chapter 1. Introduction to Investments Powered by Cognero Page 1 Indicate the answer choice that best completes the statement or answers the question.

1.Assets that either contribute to production or create income or wealth are

• financial assets.
• real assets.
• diversified assets.
• income assets.

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

• financial asset.
• diversified asset.
• capital gain.
• real asset.

3.The copyright for a music composition is an example of a

• financial asset.
• diversified asset.
• real asset.
• capital gain.

4.A corporate stock is an example of a

• financial asset.
• diversified asset.
• real asset.
• capital gain.

5.A corporate bond is an example of a

• diversified asset.
• financial asset.
• real asset.
• capital gain.

6.Real assets are used to produce economic output, while what type of asset serves to allocate how that output is divided up?

• Diversified asset
• Physical asset
• Financial asset
• Undiversified asset

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

• lack volatility.
• be stable in value.

Foundations of Investments, 1e Troy Adair, John Nofsinger (Test Bank, All Chapters. 100% Original Verified, A+ Grade) Answers at the end of each chapter.

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Name: Class: Date: Chapter 1. Introduction to Investments Powered by Cognero Page 2

• be unique.
• lack uniqueness.

8.Compared to financial assets, physical assets tend to be

• less unique.
• more unique.
• more liquid.
• higher in volume.

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

• Government
• Projects
• Investors
• Companies

10.In the following diagram of a system of financial cash flows, profits reinvested in the company are called 2 / 4

Name: Class: Date: Chapter 1. Introduction to Investments Powered by Cognero Page 3

• government.
• retained earnings.
• taxes.
• projects.

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

• taxes.
• investors.
• companies.
• government.

12.In the following diagram of a system of financial cash flows, taxes are paid by 3 / 4

Name: Class: Date: Chapter 1. Introduction to Investments Powered by Cognero Page 4

• taxes and investment.
• profits and investors.
• investors and companies.
• companies and retained earnings.

13.In the following diagram of a system of financial cash flows, what is the government's primary role?

• Provide support
• Pass regulation
• Make investments
• Collect taxes

14.In the following diagram of corporate finance decisions, which of these would be most concerned with selecting the right firm in which to invest funds?

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