Savings & Investments for Personal Finance 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!

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Question 1 1. Which of the following is NOT a step in the risk management process?

Question 2 2. How are a mutual fund and an exchange-traded fund different?

Question 3 3. What's the best explanation of diversification?

Question 4 4. Why would an investor buy investment vehicles other than mutual funds or exchange-traded funds?

Question 5 5. Which of the following is the best explanation of a private placement?

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Question 6 6. How is risk related to insurance?

Question 7 7. If a company purchases an insurance policy, which type of risk management approach is it using?

Question 8 8. What is a key difference between pension plans and 401(k) plans?

Question 9 9. What's the difference between a primary securities market and a secondary securities market?

Question 10 10. What's the best explanation of a bond?

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Question 11 11. What type of pension plan guarantees that the employee will receive a particular amount of benefit once he or she retires, even if the employer's investments don't do well?

Question 12 12. Justin makes $1000 per paycheck. He has a 401(k) plan and his employer has a 3% matching program. Justin decides he'd like to be more aggressive with his contributions, so he decides he's going to contribute 5% per paycheck. How much does this mean his employer will contribute per paycheck?

Question 13 13. Mary wants to invest in a security that is sold on stock market. If she wants the highest diversification, what should Mary do?

Question 14 14. What's the name of a disclosure document required by the SEC to be provided to potential investors of publicly traded securities?

Question 15 15. Alex wants to retire but is not vested. Why is this a bad idea?

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Question 16 16. Which of the following management decisions involves risk reduction?

Question 17 17. Which type of retirement benefit plan allows employees to contribute with money that's already been taxed?

Question 18 18. What is another term for stock?

Question 19 19. What is a creation unit?

Question 20 20. Zuk company Ltd. decides to launch a brand new type of bicycle called the Zukbike. The company accepts this risk and is prepared to pay for the losses that may occur. Which type of risk management approach is being used by the company?

Savings & Investments for Personal Finance 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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