Chaminade Univ MBA 754 (Investment Mgmt) Week 1 – Ch 01 Homework (Graded)

Grade
Details – All QuestionsQuestion 1. Question : Which of the following is an
example of a tangible asset.
Student
Answer: Bonds
mutual
funds
real
estate
stocks

Question
2. Question : Tax planning
Student
Answer: guides investment activities to maximize after-tax returns over the
long term for an acceptable level of risk. ignores the source of income and
concentrates solely on the amount of income. is primarily done by individuals
with incomes below $200,000.
is
limited to reviewing income for the current year and determining how to
minimize current taxes.

Question
3. Question : Land and buildings are examples of real property investments.
Student
Answer: True False

Question
4. Question : Which of the following economic conditions is most difficult to
identify:
Student
Answer: recovery
expansion
recession
change
in direction

Question
5. Question : Chartered Financial Analyst (CFA) is a degree offered by several
prestigious business schools.
Student
Answer: True False

Question
6. Question : Since 1900, the average annual return on savings accounts has
been higher than the return on stocks.
Student
Answer: True False

Question
7. Question : Sarah purchased a stock one year ago at a price of $32 a share.
In the past year, she has received four quarterly dividends of $0.75 each.
Today she sold the stock for $38 a share. Her capital gain per share is
Student
Answer: $3.00.
$6.00.
$(6.00).
$9.00.

Question
8. Question : A Unites States Savings Bond is an example of an investment as
defined in the text.
Student
Answer: True False

Question
9. Question : In the financial markets, individuals are net suppliers of funds.
Student
Answer: True False

Question
10. Question : Table 1.4Use the following tax rates and income brackets to
answer the following question(s).

John
and Nicole earn a combined taxable income of $148,800 from employment and file
a joint tax return. If they earn$1,000 in short-term capital gains, how much
will they owe on those gains?
Student
Answer: $100
$150
$250
$280

Question
11. Question : You should spend money on housing, clothing and basic insurance
before investing.
Student
Answer: True False

Question
12. Question : A major goal of corporate financial management is to increase
the value of the firm to investors.
Student
Answer: True False

Question
13. Question : Almost half of Americans own stock or stock mutual funds.
Student
Answer: True False

Question
14. Question : Short-term capital gains are taxed at the taxpayer’s marginal
tax rate.
Student
Answer: True False

Question
15. Question : Institutional investors manage money for businesses and
nonprofit organizations, but not for individuals.
Student
Answer: True False

Question
16. Question : Bond prices rise as interest rates decline.
Student
Answer: True False

Question
17. Question : Banks and insurance companies are examples of institutional
investors.
Student
Answer: True False

Question
18. Question : Stocks are a(n) ________ investment representing ________ of a
business.
Student
Answer: direct; ownership
direct;
debt
indirect;
ownership
indirect;
debt

Question
19. Question : The value of a derivative security is based on the value of an
underlying security.
Student
Answer: True False

Question
20. Question : Which of the following is an indirect investment?
Student
Answer: Stocks in foreign companies
U.S.
savings bonds
Mutual
funds
Real
estate

Question
21. Question : Since 1900, the average annual return on savings accounts has
been higher than the return on stocks.
Student
Answer: True False

Question
22. Question : An option to purchase common stock is a type of equity security.
Student
Answer: True False

Question
23. Question : Investment in a professionally managed pool of assets such as a
mutual fund is an example of
Student
Answer: direct investment.
indirect
investment.
derivative
investment.
speculative
investment.

Question
24. Question : An example of a direct investment is the purchase of mutual fund
shares.
Student
Answer: True False

Question
25. Question : Which one of the following would be the most liquid investment?
Student
Answer: stock
Series
EE bond
money
market mutual fund
real
estate

Question
26. Question : Danielle and Jonathan are in the 28% marginal tax bracket. They
bought 200 shares of DJN stock at $35 per share and sold them 4 years later at
$12 per share? How much did their loss reduce their taxes in the year when they
sold the stock?
Student
Answer: $0
$450
$840
$1,288

Question
27. Question : Mutual funds invest in diversified portfolios of securities.
Student
Answer: True False

Question
28. Question : Speculation refers to high-risk investments which offer highly
uncertain returns and future value.
Student
Answer: True False

Question
29. Question : Which of the following represent investment goals?
Student
Answer: I and IV only
I, III
and IV only
III
and IV only
II,
III and IV

Question
30. Question : Institutional investors are individuals who invest indirectly
through financial institutions.
Student
Answer: True False