Introduction to Business

Chapter 31: Investing

Chapter Practice Review Quizzes

1
Which is a tradable document that shows evidence of debt or ownership?
A)a commodity
B)a security
C)a yield
D)an investment
2
Which term refers to the money an investment earns?
A)the discount
B)the commission
C)the option
D)the yield
3
What is a certificate issued by a government or company by which it promises to pay back borrowed money at a fixed rate of interest?
A)a bond
B)a commodity
C)a yield
D)a coupon rate
4
What is the yield on a bond called?
A)the commission
B)the bond discount
C)the coupon rate
D)the maturity rate
5
What is the difference between the amount you pay for a bond and its face value?
A)the discount
B)the commission
C)the coupon rate
D)the yield
6
Which is NOT a type of security that the U.S. Treasury Department issues?
A)Treasury bills
B)stocks
C)notes
D)bonds
7
Treasury bills are sold in units of how much?
A)50
B)100
C)1000
D)1500
8
Which statement is NOT true regarding U.S. savings bonds?
A)They are registered bonds.
B)They are sold in denominations of $50 to $10,000
C)They cannot be bought or sold once purchased.
D)They can be redeemed at any time
9
Which statement is NOT true regarding a Series EE savings bonds?
A)It costs half the amount of its face value.
B)The interest rate fluctuates over the life of the bond.
C)You pay a penalty if you cash the bond before 5 years.
D)It can become worth more than its face value.
10
Which statement is NOT true regarding a Series I savings bonds?
A)It costs half the amount of its face value.
B)The interest rate fluctuates over the life of the bond.
C)As inflation goes up, the interest rate on the bond increases.
D)If you redeem the bond before 5 years, you forfeit three months interest.
11
Which type of bond is issued to finance city, town or regional projects?
A)Treasury bills
B)corporate bonds
C)municipal bonds
D)U.S. savings bonds
12
Which is NOT a disadvantage to investing in bonds?
A)Inflation may be greater than the interest on a bond.
B)Most bonds are written for a minimum of $1,000.
C)If sold before a bong matures, you can loose money.
D)Most bonds are secure.
13
Which statement is NOT true about stocks?
A)When you buy stock, you receive a stock certificate.
B)Stock prices change throughout the day.
C)Stocks are generally less risky than bonds.
D)Stocks are a share of ownership in a corporation.
14
Which term refers to the profit made from the sale of a financial asset such as stock?
A)a dividend
B)a capital gain
C)a capital loss
D)interest
15
Which term refers to an organized market for buying and selling financial securities?
A)a stock exchange
B)a stockbroker
C)a common stock
D)a preferred stock
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