PFIN 6th Edition By Billingsley – Test Bank

1. Mutual funds provide professional management and diversification that individual investors-especially those with limited resources-can rarely obtain on their own.
a. True
b. False
ANSWER: True

2. When completed, an investment plan is a way of translating an abstract investment target into a specific investment program.
a. True
b. False
ANSWER: True

3. Your goals tend to set the tone for your investment program, and they play a major role in determining how conservative or aggressive you’re likely to be in making investment decisions.
a. True
b. False
ANSWER: True

4. Owning common stock represents a debt investment.
a. True
b. False
ANSWER: False

5. Exchange traded notes (ETN) face both market risk and the risk of default of the issuing bank.
a. True
b. False
ANSWER: True

6. Reviewing the amounts of income that you can realistically expect to receive from Social Security and your employee pension helps you to decide whether they’ll be adequate to meet your needs.
a. True
b. False
ANSWER: True

7. The goal of sheltering income from taxes is an illegitimate goal.
a. True
b. False
ANSWER: False

8. The New York Stock Exchange (NYSE) is a part of the dealer market.
a. True
b. False
ANSWER: False

9. The over-the-counter market is an organized securities exchange.
a. True
b. False
ANSWER: False

10. A corporation’s annual stockholders’ report provides financial data and other information related to both past and planned activities.
a. True
b. False
ANSWER: True