Question 1

(TCOs 6 and 7) A(n) _____ fund is a mutual fund in which new shares are issued and redeemed by the investment company at the request of investors.

• open-end

• closed-end

• load

• no-load

• convertible

Question 2

(TCOs 6 and 7) A(n) _____ mutual fund is one in which no sales charge is paid by the individual investor.

• closed-end

• open-end

• no-load

• load

• convertible fund

Question 3

(TCOs 6 and 7) Mary Cooper just purchased 200 shares in the All-American Fidelity Fund. The purchase cost for each share was $40. If this fund charges a 5% load, what is the total amount of commission she will pay the investment company?

• $10

• $200

• $40

• $400

• It is impossible to calculate Ms. Cooper's total investment with this information.

Question 4

(TCOs 6 and 7) A(n) _____ fund is a mutual fund that invests in stocks issued by companies with a long history of paying dividends.

• balanced

• equity income

• industry

• sector

• money market

Question 5

(TCOs 6 and 7) A mutual fund that invests in the common stocks of companies in the same industry is called a(n) _____ fund.

• growth-income

• income

• sector  

• small-cap

• money market

Question 6

(TCOs 6 and 7) Teresa Jones is interested in an indirect real estate investment. An example of this would be

• a single-family dwelling.

• a duplex.

• an apartment.

• land.

• a participation certificate.

Question 7

(TCOs 6 and 7) Samuel may participate in a direct real estate investment opportunity, so he would only need to consider which option as an example of a direct real estate investment?

• Limited partnership

• Real estate dwelling

• Real estate syndicate

• Real estate investment trust

• Mortgage pool

Question 8

(TCOs 6 and 7) The real property investment most widely favored by the small investor besides the purchase of a home is

• a Post Office building.

• land.

• a building with 20 apartments.

• a condominium.

• a duplex, fourplex, or small apartment building.

Question 9

(TCOs 6 and 7) An investment in _____ is an example of an indirect real estate investment.

• a single-family home

• a duplex

• an apartment building

• land

• a REIT

Question 10

(TCOs 6 and 7) If you have purchased an apartment building for $2 million, which of the following selections would exhibit the highest degree of financial leverage?

• You put $500,000 down and borrow $1,500,000.

• You put $250,000 down and borrow $1,750,000.

• It is impossible to tell.

• You borrow all $2 million.

• You put $100,000 down and borrow $1,900,000.

Question 11

(TCOs 6 and 7) All of the following are misconceptions about retirement planning except for which?

• My expenses will drop when I retire.

• My retirement will last only 8 years.

• I can depend on Social Security income and Medicare for medical bill payment.

• I can depend on my company pension.

• My savings will still be affected by inflation.

Question 12

(TCOs 6 and 7) Financial planning for retirement is vitally important for all of the following reasons except

• you can expect to live in retirement for many years.

• Social Security and private pensions may be insufficient to cover the cost of living.

• inflation may diminish the purchasing power of your retirement savings.

• you can expect that Social Security will be sufficient to live on.

Question 13

(TCOs 6 and 7) Which statement is correct regarding retirement living expenses?

• It is impossible to estimate your spending needs.

• Your spending patterns will probably not change.

• You'll use a smaller amount of money for food, housing, and medical care.

• The exact amount of money you'll need is impossible to predict.

• Work-related expenses, such as driving back and forth to work, tend to be lower during retirement.

Question 14

(TCOs 6 and 7) The of division of pensions in a divorce situation primarily depends on the _____.

• length of the divorce period

• husband's generosity

• length of the marriage

• judge's decision

Question 15

(TCOs 6 and 7) When you retire, which one of the following expenditures is likely to decrease?

• Medical expenses

• Insurance expenses

• Clothing expenses

• Expenses for leisure activities

• Gifts and contributions

Question 16

(TCOs 6 and 7) Estate planning involves _____ if a person is married.

• the interest of at least two people

• fewer legal requirements

• fewer financial responsibilities

• seeking the services of a securities broker

• None of the above

Question 17

(TCOs 6 and 7) If Gerry Legere dies without writing a will, legally this is referred to as the following situation.

• Testosterone

• Intestate

• Interstate

• Intermediate

• None of the above

Question 18

(TCOs 6 and 7) If you do not have a valid will when you die,

• the IRS confiscates your property.

• the federal court decides how the property should be distributed.

• your relatives or friends will get the property.

• your local custom will determine how the property is distributed.

• the state's law of descent and distribution becomes your will.

Question 19

(TCOs 6 and 7) A(n) _____ is a type of will in which half of your estate is taxed at your death and half at your spouse's death.

• simple will

• traditional marital share will

• exemption trust will

• stated dollar amount will

Question 20

(TCOs 6 and 7) The following type of will allows you to pass to your spouse any amount that satisfies your family objective when you die.

• Stated dollar amount will

• Traditional marital share will

• Exemption trust will

• Simple will