Principles of Investments: Final Exam UPDATED Exam Questions and CORRECT Answers
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Course
Investments:
Institution
Investments:
Principles of Investments: Final Exam
UPDATED Exam Questions and
CORRECT Answers
What are the 6 asset choices - Correct Answer- Stocks
Bonds
Derivatives
Cash
Bitcoin
Commodities
Futures
What are stocks - Correct Answer- A security representing ownership in a corporation
Principles of Investments: Final Exam
UPDATED Exam Questions and
CORRECT Answers
What are the 6 asset choices - Correct Answer- Stocks
Bonds
Derivatives
Cash
Bitcoin
Commodities
Futures
What are stocks - Correct Answer- A security representing ownership in a corporation
What are bonds - Correct Answer- A long-term liability with a specific amount of interest and
maturity date
What are derivatives - Correct Answer- An arrangement or instrument whose value derives
from and is dependent on the value of an underlying asset
What are commodities - Correct Answer- a raw material or primary agricultural product that
can be bought or sold
What are futures - Correct Answer- An agreement for the future delivery of a commodity
What is an investment in lay usage? - Correct Answer- Buying stocks or bonds
What is an investment in terms of economics - Correct Answer- corp. buys property, plant,
equipment
What are two sources of return - Correct Answer- Income - div or interest payments
Capital gains
, What are two types of risk - Correct Answer- Possibility of loss
uncertainty of future returns
What is marketability? - Correct Answer- How easily an asset can be nought or sold
What is liquidity - Correct Answer- How quickly can the asset be turned into CASH
What is depth of market - Correct Answer- How many buyers and sellers there are
What is asset allocation more focused on? - Correct Answer- Asset classes
What is diversification focus on ? - Correct Answer- Reducing risk
Why are markets efficient? - Correct Answer- Competition among investors
participants may readily enter and exit the market
information is readily available
What does an efficient market imply? - Correct Answer- Investors cannot CONSISTENTLY
outperform the market.
What should higher risk mean? - Correct Answer- Higher returns
Length of "trading" - Correct Answer- Short term
Length of "Investing" - Correct Answer- Long term
What is financial analysis built on? - Correct Answer- Assumptions
historical data
NYSE - Correct Answer- An organized stock exchange
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