TEST BANK for Essentials of Investments, 12th Edition ISBN13: 9781260772166 By Zvi Bodie, Alex Kane and Alan Marcus.
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Course
Institution
Cambridge University (CAM)
TABLE OF CONTENTS Part ONE: ELEMENTS OF INVESTMENTS Chapter 1: Investments: Background and Issues Chapter 2: Asset Classes and Financial Instruments Chapter 3: Securities Markets Chapter 4: Mutual Funds and Other Investment Companies Part TWO: PORTFOLIO THEORY Chapter 5: Risk, Return, a...
,CHAPTER 1
1) Financial assets represent _______ of total assets of U.S. households in 2019.
A) about 70%
B) over 90%
C) under 10%
D) about 30%
2) Real assets in the economy include all but which one of the following?
A) Land
B) Buildings
C) Consumer durables
D) Common stock
3) In 2019, net worth represented _______ of the liabilities and net worth of commercial
banks.
A) about 51%
B) about 91%
C) about 11%
D) about 31%
4) According to the Flow of Funds Accounts of the United States, the largest single asset of
U.S. households is _______.
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, A) mutual fund shares
B) real estate
C) pension reserves
D) corporate equity
5) According to the Flow of Funds Accounts of the United States, the largest liability of
U.S. households is _______.
A) mortgages
B) consumer credit
C) bank loans
D) gambling debts
6) _______ is not a derivative security.
A) A share of common stock
B) A call option
C) A futures contract
D) A put option
7) According to the Flow of Funds Accounts of the United States, the largest financial asset
of U.S. households is ________.
A) mutual fund shares
B) corporate equity
C) pension reserves
D) deposits
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, 8) Active trading in markets and competition among securities analysts helps ensure that:
1. Security prices approach informational efficiency.
2. Riskier securities are priced to offer higher potential returns.
3. Investors are unlikely to be able to consistently find under- or overvalued securities.
A) 1 only
B) 1 and 2 only
C) 2 and 3 only
D) 1, 2, and 3
9) The material wealth of society is determined by the economy's _______, which is a
function of the economy's _______.
A) investment bankers; financial assets
B) investment bankers; real assets
C) productive capacity; financial assets
D) productive capacity; real assets
10) Which of the following is not a money market security?
A) U.S. Treasury bill
B) 6-month maturity certificate of deposit
C) common stock
D) mortgage backed security
11) _______ assets generate net income to the economy, and _______ assets define
allocation of income among investors.
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