1. An example of a high risk/high reward investment would be Select one: a. Gove

Question

1. An example of a high risk/high reward investment would be

Select one:

a. Government Bonds

b. Corporate Bonds

c. Certificates of Deposit

d. Mutual Funds

e. Junk Bonds

2. NAV stands for

Select one:

a. New Asset Value

b. Net Asset Vector

c. Net Asset Value

d. Negative Ancillary Value

e. Non Actuary Value

3. Cody wants to create a relatively safe account in which the interest rates are based on the market. He plans to write few checks while maintaining at least a $1,000 in this account. Cody should invest in a _____________.

Select one:

a. Money market account

b. Savings bond

c. CD

d. Interest-Earning Checking account

e. None of these

4. Mutual Funds would be best suited for

Select one:

a. Low-Income individuals

b. High-Income Individuals

c. Inexperienced Investors

d. Professional Investors

e. Senior Citizens

5. Sean wants to be invested in something which is very liquid. However, generally, the more liquid an asset the _______ the rate of return.

Select one:

a. Higher

b. Lower

c. There is no coloration between the two

d. None of these

e. More constant

6. Stocks are considered a ________ security.

Select one:

a. Safety

b. Income

c. Growth

d. Both income and growth

e. All of these

7. The most common type of employer-sponsored pension plan is called:

Select one:

a. Defined Retirement

b. Defined Benefit

c. Defined Contribution

d. Defined Returns

e. Delayed Contribution

8. All of the following are types of deposit institutions except

Select one:

a. Mutual Savings Banks

b. Commercial banks

c. Credit Unions

d. All of these are deposit institutions

e. Life Insurance Companies

9. Which one of these investors would likely see the greatest returns (assuming similar interest rates)?

Select one:

a. Kristin invests monthly between ages 30 and 60

b. Stevens parents invest a large sum of money at birth

c. Jan keeps all her assets in cash

d. Will begins investing heavily at age 50

e. All of these investors would likely get the same return per dollar

Explanation / Answer

1)

Junk bonds are high risky and high yield investments. These are investment grade securities with very less and bad rating. Junk bonds are usually sold at higher discount.

Hence, correct option is e. Junk Bonds.

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