FINANCE-Description This quiz covers the content from Week 2.

Description

This quiz covers the content from
Week 2. You must complete the quiz by Midnight, Saturday.
Here are the parameters
of the quiz:

This quiz includes three
(3) calculation, two (2) matching, two
(2) multiple-choice, two (2) ordering, and 11
true/false questions that check your understanding of the major
concepts covered during Week 2.
On the True/False questions,
if there is an introductory statement in italics you may
assume that it is true. For example, “The Earth is in orbit
around the Sun. The Earth is much larger than the Sun.” (TRUE
or FALSE?) You can assume the italicized statement is true.
So, if you focus only on the second statement, you should determine
it is FALSE.
You will see all of the
questions at one time. Select the correct answer for each question, and
then review the questions and your answers before finishing the quiz and
clicking Submit.
There is NO time limit.

You may attempt to take the
quiz ONE time.
After you submit your answers
to the quiz, you will see your score.

Instructions

Multiple
Attempts

Not allowed. This test can only be
taken once.

Force
Completion

This test can be saved and resumed
later.

Question
1

You have an investment opportunity which yields 9% per
year. About how many years will it take your initial investment of $10,000
to grow to a total of of $40,000? Please give your answer as a whole
number (1,2,3, etc.) rather than a decimal (1.2, 4.5, etc.).

0.2 points
Question
2

A friend proudly tells you that she has doubled her
salary since she began working at her company. You know that she joined
that company ten years ago. What average annual raises has your friend
received? Please answer with a whole number (1, 2, 3, etc.) rather than
with a decimal or percentage answer. That is, if you think that the answer
is 3.1%, then please enter “3” as the answer.

0.2 points
Question
3

You look at your investment account and notice that it
is now worth $3,000. You have had the account for 6 years and it has had
an average annual return of 12%. You made just the initial deposit to the
account. How much was that initial deposit? Please give your answer as a
whole number (1,2,3, etc.) rather than a dollar amount or a decimal ($20, 5.9,
etc.).

0.2 points
Question
4

Future Value = Present Value – Interest Earned

True

False

0.2 points
Question
5

In order to build a diversified portfolio the
individual assets cannot be perfectly correlated with each other.

True

False

0.2 points
Question
6

PV = FV / (1 + i) ^ n

True

False

0.2 points
Question
7

If you were to invest $1 at 5% for 2,000 years you
would end up with more dollars than there are atoms in the galaxy.

True

False

0.2 points
Question
8

Assets may be broadly defined as either real or
financial. An example of a financial
asset is education.

True

False

0.2 points
Question
9

In general, the more liquid an investment, the higher
the return will be.

True

False

0.2 points
Question
10

If an investor makes an equity investment for ten
years, the range of likely returns will be narrower than if the investment
is held for only one year.

True

False

0.2 points
Question
11

The risk of any investment is defined as the variation
of likely returns about the mean expected return.

True

False

0.2 points
Question
12

If you accept the efficient markets hypothesis, then
you would study the pattern of the price chart of a stock for a buy signal
before making your investment.

True

False

0.2 points
Question
13

Investors seek undervalued assets to purchase.

True

False

0.2 points
Question
14

An efficient portfolio is one in which returns are
maximized for a given level of risk.

True

False

0.2 points
Question
15

Rank these asset categories from lowest (1) to highest
(5) risk.

International equities

Domestic common stocks

Artworks, collectibles

Municipal bonds

Cash

0.2 points
Question
16

Rank these asset categories from lowest (1) to highest
(5) expected return.

Equity mutual funds

Real estate

Corporate bonds

U.S. Treasury bills

Balanced (stock + bond) funds

0.2 points
Question
17

Select five considerations which guide the investor
into an appropriate asset category. (Select five from the list.)

Return required

Internet access

Employment status

Time horizon

Funds available

Number of children of the investor

Risk tolerance

Location of the investor

Liquidity required

0.2 points
Question
18

In the lecture about compound interest [BLANK]. (You
may need to select more than one item from the list.)

St. Peter diversified his
investments

Corporate bonds yielded more than
the bank account

The population growth rate
(currently about 1.1% per year) has been the same for over 2,000 years.

St. Paul put all his money into a
single investment

Albert Einstein was quoted

0.2 points
Question
19

On the line next to each investment style Column A,
place the letter of the famous investor in Column B whom it describes.

Investor Psychology

Growth

Technical Analysis

Value

A.

Peter Lynch

B.

John Maynard Keynes

C.

Charles Dow

D.

Benjamin Graham and David Dodd

0.2 points
Question
20

On the line next to each investment concept, place the
letter of the person who developed it.

Stock market index

Efficient markets hypothesis

Market diversification

Modern portfolio theory

A.

Charles Dow

B.

Eugene Fama

C.

Harry Markowitz

D.

Roger Ibbotson

0.2 points
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