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Investing Your Money Chapter Exam

Exam Instructions:

Choose your answers to the questions and click 'Next' to see the next set of questions. You can skip questions if you would like and come back to them later with the yellow "Go To First Skipped Question" button. When you have completed the practice exam, a green submit button will appear. Click it to see your results. Good luck!

Page 1

Question 1 1. How are a mutual fund and an exchange-traded fund different?

Question 2 2. Yvette is risk intolerant and does not want there to be much fluctuation in value for her assets. Which asset would Yvette most likely keep?

Question 3 3. Which of these bond types are issued in the names and addresses of their holders?

Question 4 4. Select the scenario that produced the largest profit.

Question 5 5. When will the yield equal the interest?

Page 2

Question 6 6. Company A is giving stockholders dividends of $4 per stock. How much in dividends does Joe get if Joe has 30 preferred stocks in this company?

Question 7 7. If a bond pays $40 annually in interest, how much is paid per month in interest?

Question 8 8.

Sarah is willing to pay $500 per month for an annuity with an annual interest rate of 6% where the bank pays the interest on a monthly basis. Sarah wants to know how much her annuity will be worth in 5 years.

What is i equal to in this problem?

Question 9 9. Which of the following is the best explanation of a private placement?

Question 10 10. Why would an investor buy investment vehicles other than mutual funds or exchange-traded funds?

Page 3

Question 11 11. Dividends are _____.

Question 12 12. How is a bond described?

Question 13 13. What is another term for stock?

Question 14 14. A bond with a par value of $2,000 and an interest of 5% gets paid what amount of interest annually?

Question 15 15. What's the name of a disclosure document required by the SEC to be provided to potential investors of publicly traded securities?

Page 4

Question 16 16. How much will Neil spend to buy 30 stocks at $14.31 per stock?

Question 17 17. Stocks are _____.

Question 18 18. What does the P stand for in this formula?

Question 19 19. Which of these bond types provides the bondholder with the right to exchange the bond for a specific number of shares in the company's common stock before the maturity date?

Question 20 20. Which of these bond types use the issuer's general credit rating to back the bond?

Page 5

Question 21 21. When does a term bond become mature?

Question 22 22. The company Walter Spring just gave out dividends of $2.13 per stock. How much did Jimmy get in dividends for his 25 stocks in the company?

Question 23 23. What is a creation unit?

Question 24 24.

Bob goes to the bank to ask about an annuity. Bob tells the banker that he can put $300 into an annuity every month. The banker tells him he can make monthly interest payments with an annual interest rate of 4%. Bob wants to know the value of his annuity after 20 years, to the nearest dollar.

What is the future value after 20 years?

Question 25 25.

X is a type of bond that is payable to whoever holds it. As such, anyone can claim ownership of X. Because of the risk associated with X, very few are in circulation today.

Identify X.

Page 6

Question 26 26. George reaches into his wallet and pulls out a $20 US bill to pay for his coffee. By using currency to make a purchase, what is George actually doing?

Question 27 27. What's the best explanation of diversification?

Question 28 28. Determine the interest rate that you will use in the formula for present value if the annual interest rate is 15% and payments are on a monthly basis.

Question 29 29. Which of these bond types are bonds in which a portion of the outstanding bonds mature or become due at several dates which typically fall in a series?

Question 30 30. Mary wants to invest in a security that is sold in the stock market. If she wants the highest diversification, what should Mary do?

Investing Your Money Chapter Exam Instructions

Choose your answers to the questions and click 'Next' to see the next set of questions. You can skip questions if you would like and come back to them later with the yellow "Go To First Skipped Question" button. When you have completed the practice exam, a green submit button will appear. Click it to see your results. Good luck!

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