Chapter 1 An Introduction to Investments
TRUE/FALSE
investing.
purchasing and selling securities.
differ.
an investment.
differ from the expected.
and subsequently traded in the “secondary” market.
a capital gain.
outperform the market consistently.
outperform the market.
seeking positions as portfolio managers.
risk and return.
MULTIPLE CHOICE
1. need for funds to meet emergencies
2. retirement income
3. desire to leave an estate for children
a. 1 and 2
b. 1 and 3
c. 2 and 3
d. all of the above
by an economist?
a. equipment
b. land
c. stock
d. savings account
layperson’s general use of the term?
a. equipment
b. land
c. stock
d. savings account
characteristics including
1. existence of secondary markets
2. risk
3. potential for capital gains
a. 1 and 2
b. 1 and 3
c. 2 and 3
d. all of the above
a. depends solely on price fluctuations
b. should be maximized to increase returns
c. is reduced through specialization
d. refers to the uncertainty of returns
The existence of these markets suggests that
a. investors cannot earn superior returns
b. investors cannot expect to outperform the market
consistently
c. securies prices are random
d. bearing additional risk will not increase return
a. income
b. capital gains
c. taxes
d. risk
a. frequently buying securities
b. frequently selling securities
c. frequently buying and selling securities
d. investing