Jared has purchased a corporate bond with a face value of 10,000. He receives interest in the amount of 300 every six months. What is the interest rate of the bond?
A) 2
B) 3
C) 4
D) 5
E) 6
Question 2 - At the beginning of the year, John Stewart invested 10,000. Twelve months later, John sold his investment for 11,000. Assuming he received no dividends or interest during this time, what is his rate of return?
A) 110
B) 100
C) 10
D) 1
E) It is impossible to calculate rate of return with this information.
Question 3 - Your grandmother calls you for advice on where to invest 3000 she received from selling an antique piece of furniture. She knows you have taken business classes, so she wants you to guide her toward an investment that will help maintain the value of her money. You know that your grandma needs an investment for capital preservation, so you tell her to:
A) invest in the stock market-technology stocks are hot right now.
B) invest in corporate bonds.
C) invest in a CD; she may get 2.25 interest rate.
D) try short selling.
E) purchase stock options.
Question 4 - Suppose you have just inherited 10,000 from an uncle that passed away. You would like to invest this money so that it will grow and you can use it in the future to help supplement your retirement. Which of the following is an appropriate investment for growth?
A) Certificates of deposit
B) Money market accounts
C) Foreign stocks
D) Corporate bonds
E) Checking accounts
Question 5 - Which of the following would most likely be considered the safest investment?
A) Corporate bond
B) Certificate of deposit
C) Common stock
D) Cumulative preferred stock
E) Preferred stock
Question 6 - If you think that the price of a stock is going to go down in the near future, which investment strategy would you use to profit from the decline?
A) Short selling
B) Buying on margin
C) Dollar-cost averaging
D) Futures contract
E) Qualitative analysis
Question 7 - All of the following would likely be considered investments for income except:
A) dividend paying stocks.
B) government bonds.
C) stock options.
D) corporate bonds.
E) preferred stock.
Question 8 - The goal of the Industrial Workers of the World was to:
A) eliminate depersonalization of workers.
B) improve the moral standards of labor and business.
C) improve its members' living standards.
D) overthrow capitalism.
E) take over the steel industry.
Question 9 - What is the famous index that tracks closely to the stock market?
A) S&P
B) Bloomberg
C) The Dow Jones
D) The New York Stock Exchange
E) The Chicago Board of Exchange
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