chapter1.doc - Chapter 01 The Investment Environment...

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Chapter 01 - The Investment Environment Chapter 01 The Investment Environment Answer Key Multiple Choice Questions 1. The material wealth of a society is a function of _________. A. all financial assets B. all real assets C. all financial and real assets D. all physical assets E. all commodities The material wealth of a society is a function of all real assets. 2. _______ is/are a real asset(s). A. Only land B. Only machines C. Only stocks and bonds D. Only knowledge E. Land, machines and knowledge are real assets Land, machines and knowledge are real assets; stocks and bonds are financial assets. 3. The means by which individuals hold their claims on real assets in a well-developed economy are A. Investment assets. B. Depository assets. C. Derivative assets. D. Financial assets. E. Exchange-driven assets. Financial assets allocate the wealth of the economy. Example: it is easier for an individual to own shares of an auto company than to own an auto company directly. 4. _______ is/are financial assets. A. Only bonds B. Only machines C. Only stocks D. Stocks and bonds E. Knowledge 1-1
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Chapter 01 - The Investment Environment Machines and knowledge are real assets; stocks and bonds are financial assets. 5. _________ financial asset(s). A. Buildings are B. Land is a C. Derivatives are D. U.S. Agency bonds are E. Derivatives and U.S. Agency bonds are Land and Buildings are real assets. 6. Financial assets ______. A. directly contribute to the country's productive capacity B. indirectly contribute to the country's productive capacity C. contribute to the country's productive capacity both directly and indirectly D. do not contribute to the country's productive capacity either directly or indirectly E. are of no value to anyone Financial assets indirectly contribute to the country's productive capacity because these assets permit individuals to invest in firms and governments. This in turn allows firms and governments to increase productive capacity. 7. In 2009, ____________ was the most significant real asset of Taiwanese households in terms of total value. A. consumer durables and semi-durables B. foreign assets C. real estate D. mutual funds E. loans See Table 1.1. 8. In 2009, Currency and ____________ were the least significant financial assets of Taiwanese households in terms of total value. A. real estate B. mutual funds C. life insurance reserves D. debt securities and other E. pension fund reserves See Table 1.1. 1-2
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Chapter 01 - The Investment Environment 9. In 2009, ____________ was the most significant financial asset of Taiwanese households in terms of total value. A. real estate B. mutual funds C. debt securities and other D. life insurance reserves E. deposits See Table 1.1. 10. In 2009, ____________ was the most significant asset of Taiwanese households in terms of total value. A. real estate B. mutual funds C. debt securities and other D. life insurance reserves E. pension fund reserves See Table 1.1.
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