FINA3331_Ch1_Study Guide - Chapter 1 UNDERSTANDING...

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Chapter One Understanding Investments 1 Chapter 1 UNDERSTANDING INVESTMENTS Multiple Choice Questions 1. Stocks and bonds would be classified as: a. real assets b. indirect assets c. personal assets d. financial assets (d) 2. The investment professionals that arrange the sale of new securities are called: a. arbitragers b. traders c. investment bankers d. specialists (c) 3. Investment professionals whose jobs may depend on their performance relative to the market are the: a. registered representatives b. security analysts c. investment bankers d. portfolio managers (d) 4. Most financial advisors are registered with the Securities and Exchange Commission as: a. registered representatives. b. registered investor advisors. c. registered financial planners. d. registered securities consultants. (b)
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Chapter One Understanding Investments 2 5. A Chartered Financial Analyst designation is a (an) a. SEC-approved and awarded designation. b. certification of a successful investing record. c. professional designation awarded for meeting recognized standards of conduct and competency. d. professional designation awarded by the brokerage industry. (c) 6. Underlying all investments is the tradeoff between: a. expected return and actual return b. low risk and high risk c. actual return and high risk d. expected return and risk (d) 7. Most investors are risk averse which means: a. they will assume more risk only if they are compensated by higher expected return. b. they will always invest in the investment with the lowest possible risk. c. they actively seek to minimize their risks. d.
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FINA3331_Ch1_Study Guide - Chapter 1 UNDERSTANDING...

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