A) A bondIs that 18. is equity that represents ownership in a company B) Stock C

Question

A) A bondIs that 18. is equity that represents ownership in a company B) Stock C) An IPO D) An offering 19. What is meant by "flipping" properties? A) To buy, upgrade, and sell property over a short time period for a profit C) D) To have the bank take ownership of a property switch properties with someone randomly To pool funds from a group of individuals and invest in real estate Which of the following investments would be considered the most appropriate savings vehicle for an emergency fund? Rare jewels Savings account Blue chip stocks Certificate of deposit 20. A) B) C) D) 21. A) B) C) D) Inflation is always bad for the economy helpful to an incumbent seeking re-election a necessity to strengthen the dollar the increase of prices for goods and services over time What is the inverse relationship between bond prices and interest rates? When interest rates go up, bond prices increase; when interest rates go down, bond prices increase 22. A) B) When interest rates go down, bond prices fall; when interest rates go up, bond prices C) When interest rates go up, bond prices fall; when interest rates go down, bond prices D) There is no inverse relationship between bond prices and interest rates increase increase

Explanation / Answer

Solution:-

18) Ans:- B)Stock

Reason:-

A) Bond is the debt not equity

B) Stock is the part of ownership.

C)IPO stands for initial public offer, but no share are yet issued.

D) An offering is just an offer.

19)Ans:- A)To buy ,upgrade, and sell property over a short time period for profit.

Reason:-

    Flipping means buying the property and selling it for profit over the short period of time. All others points does not give that meaning except "A".

20)Ans:- D)Certificate of deposit.

Reason:-

A) Rare jewels value is not fixed it varies and it take time to sell.

B) Saving account is the easiest way to get money when needed but offer less rate of interest.

c) Stocks have always risk associated with then whether blue chip or not.

d) Certificate of deposit offer more interest rate than saving account , in case of emergency it can be withdrawn prematurely also very easily.

21)Ans:- D) the increase of prices for goods and services over time.

Reason:-

A) May not be always bad for economy.

B) May be but it is not a proper reason.

C)Inflation does not strengthen dollar , it weakens it.

D) Inflation is the increase of prices for goods and services over time. This is the basic meaning if inflation.

22) Ans:- C) When interest rate go up, bond prices fall , when interest rate go down , bond prices increase.

Reason:-

There is an inverse relation between the interest rate and the price of bond. When interest rate increases the required rate of return increases , hence the price decreases and vice versa.

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