Assignment 2 Assignment 2 1. Which statement is most true

Please answer the 30 questions below with the correct answer from the choices listed below for each. I would greatly appericate if I could have this within an hour and will tip for a job well done. Thank you.

Question 1

If a bond is purchased at a price below the face value, the yield to maturity is:
greater than the stated interest rate. 
the same as the stated interest rate. 
less than the stated interest rate. 
zero. 
of no significance. 
.

Question 2 

A long-term technique used by investors who purchase an equal dollar amount of the same stock at equal intervals in time is called:
dollar cost averaging. 
dividend reinvestment plan. 
buy and hold technique. 
regulated transaction. 
secured transaction. 
.

Question 3 

A stock that sells for less than $1 per share is called a:
fractional stock. 
penny stock. 
dollar stock. 
ten-dollar stock. 
bad investment. 
.

Question 4 

Which one of the following expenditures for retirees is likely to decrease?
clothing expenses 
insurance expenses 
medical expenses 
expenses for leisure activities 
gifts and contributions 
.

Question 5 

During your retirement, your employer’s health insurance plan and Medicare will cover your medical expenses.
false 
true 
.

Question 6 

What is likely to be an individual’s single biggest asset?
Their automobile 
Their jewelry 
Their bank account 
Their home 
None of the choices 
.

Question 7 

With an open-end credit, you pay back one-time loans in a specified period of time in equal amounts.
false 
true 
.

Question 8 

Which of the following is most likely not a valid reason for using credit?
Borrowing for a stay in a hospital because of appendicitis 
Borrowing to purchase a car so that you can go to work full time 
Borrowing to buy a printer for your home office now because you now it will be twice as expensive in two years 
Borrowing to pay for your expensive dinner and movie every week 
All of the choices are valid reasons for using credit 
.

Question 9 

Gordon Carey uses his Visa card to purchase a new digital camera and lens. What type of credit did Gordon use?
Installment sales credit 
Installment cash credit 
Single lump sum credit 
Revolving credit 
Incidental credit 
.

Question 10 

For most mutual funds, the net asset value is calculated:
yearly. 
quarterly. 
weekly. 
daily. 
whenever an investor calls and requests a price quote. 
.

Question 11 

Which of the following is an advantage of an exchange traded fund (EFT)?
No minimum investment amount 
Shares can be bought and sold through a broker at any time at the current price 
Management fees are often lower 
Can use limit orders to purchase EFTs 
All of the choices are advantages of EFTs 
.

Question 12 

For a mutual fund, the turnover ratio measures:
the length of time a manager has been in charge of the fund. 
the amount of profit the fund earns from one investment period to the next. 
the number of months the average investor holds the fund before selling. 
the percentage of a fund’s holdings that have changed during a 12-month period. 
the percentage of institutional investors who own the fund. 
.

Question 13 

Grady Perdue has assets worth $1,500,000 and has written a legal document that specifies that all of his money go to his children. After he dies, there is a legal process to determine whether his document specifying how his assets be divided is valid. This is also the legal process by which his executor manages and distributes his property. What is this legal process called?
An estate 
A will 
A trust 
Probate 
None of the choices 
.

Question 14 

A trust established by your will that becomes effective upon your death is called a(n) ____________ trust.
testamentary 
living 
revocable 
irrevocable 
insurance 
.

Question 15 

A legal document authorizing someone to act on your behalf is called a:
codicil. 
rider. 
power of attorney. 
trustor. 
proxy. 
.

Question 16 

A prime reason for buying an annuity is to:
save money for college education 
start a new business 
accumulate funds to invest in stocks 
give you retirement income for the rest of your life 
get rich quick 
.

Question 17 

Who has the greatest need for life insurance?
households with small children 
singles living alone 
singles living with parents 
dual income couple 
children 
.

Question 18 

Jerry Lewis is thinking about purchasing some life insurance. He goes to a company that is owned by shareholders. What type of life insurance company has he gone to?
A stock life insurance company 
A debt life insurance company 
A mutual life insurance company 
An exclusionary life insurance company 
None of the choices 
.

Question 19 

Automobile liability insurance covers the insured when he or she is held responsible for losses suffered by others.
True 
False 
.

Question 20 

In times of high inflation, personal incomes generally keep up with the rate of inflation. 

True 
False 
.

Question 21 

Similar to corporate shareholders, holders of mutual funds have a say in running the company, since they have equity interest in the pool of assets and a residual claim on the profits.

True 
False 
.

Question 22 

Savings is the accumulation of excess funds by intentionally spending less than you earn.
True 
False 
.

Question 23 

A business cycle is a pattern of economic activity that includes an expansion, peak, contraction, and trough.
True 
False 
.

Question 24 

High-demand occupations tend to pay low salaries.
True 
False 
.

Question 25 

The most expensive loans are available from:
parents. 
friends. 
banks. 
finance companies. 
credit unions. 

Question 26 

Frank Wert wants to get a lower interest rate on his loan for the purchase of a new boat. He uses the boat as collateral for the loan. In which way is Frank reducing his lender’s risk?
He is sharing the interest rate risk with his lender 
He is pledging valuable assets that can be seized if the loan is not repaid 
He is taking a larger stake in the asset he is purchasing 
He is repaying the loan over a faster period of time 
None of the choices 
.

Question 27 

There are no costs involved in filing for a bankruptcy.
false 
true 
.

Question 28 

Kevin Brown rides his bicycle to work so that he doesn’t have to worry about getting in a car accident. How is Kevin managing his risk?
Answer Risk Avoidance 
Risk Reduction 
Risk Assumption 
Risk Shifting 
Risk Creation 
.

Question 29 

Negligence refers to:
Answer failure to take ordinary and reasonable care. 
cancellation of insurance. 
property damage. 
high risk insurance coverage. 
common hazards in our society. 
.
3.33 points 
Question 30 

Using a home security system is an example of ____________ risk.
Answer shifting 
accepting 
reducing 
sharing 
transferring 

 

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