Reference no: EM133114523

1. According to the semi-strong form efficient market hypothesis, Multiple Choice 

a. All publicly available information is incorporated in a stock's price 

b. Looking at current and past information on stock price patterns and the number of shares traded is not useful and all publicly available information is incorporated in a stock's price 

c. Looking at current and past information on stock price patterns and the number of shares traded is not useful and all privately available information is incorporated in a stock's price 

d. Looking at current and past information on stock price patterns and the number of shares traded is not useful 

e. All privately available information is incorporated in a stock's price

2. Which of the following is not a feature of a defined benefit plan? Multiple Choice 

a. Tax Deferral on Income and Capital Gains and Taxation of Pension Payout of Original Deposit 

b. Tax Deferral on Income and Capital Gains 

c. Typically Indexed for Inflation 

d. Taxation of Pension Payout of Original Deposit 

e. Taxation of Pension Payout of Original Deposit and Typically Indexed for Inflation

3. Which of the following is not a reason to have a will? Multiple Choice 

a. States may mandate that assets be given to elderly parents only if they can demonstrate that they need the money. 

b. All of these are reason for which to have a will. 

c. Important friends are entitled to nothing without a will. 

d. You may want your spouse to receive all your assets. 

e. The will can provide for tax advantaged trusts.

4. Which of the following is not a factor that leads to market interest rate fluctuations? Multiple Choice 

a. Changes in the expected rate of inflation 

b. All of the choices are factors 

c. Federal Reserve actions 

d. Economic activity 

e. Cyclical investor interest in bonds

5. Why does capital needs analysis qualifies as a PFP integration approach? Multiple 

Choice 

a. It takes into account current income and expenses and assets and liabilities. 

b. It takes into account past income and expenses and assets and liabilities. 

c. It takes into account all current and projected income and expenses and assets and liabilities over our life cycle. 

d. It takes into account projected income and expenses and assets and liabilities over our life cycle.

e. None of the choices are correct.

6. Which of the following is incorrect? Multiple Choice 

a. The letter of instruction can indicate where the will and other important papers are located. 

b. All of the choices are correct. 

c. The letter of instruction can discuss sensitive family matters that an executor may find helpful. 

d. The letter of instruction is a legal document. 

e. The letter of instruction can include burial wishes.

7. Which of the following is not a source of cognitive errors? Multiple Choice 

a. Lack of knowledge 

b. Weakness in perception and memory 

c. All of these are sources of cognitive errors 

d. Hubris 

e. Limited processing scope and speed

8. Which of the following is not an advantage associated with a financial plan? Multiple Choice 

a. It compels you to order your priorities and provide a specific financial solution using integrative techniques. 

b. It presents a document to refer back to so that you can compare actual with projected results and refresh your memory as thoughts of the original steps fade. 

c. It imposes overall structure on the process through specific steps that should be taken. 

d. All of these are advantages. 

e. It provides a numerical base for adjustments as goals and resources change in the future.

9. The relationship that exists between bond maturity and risk can be explained through observing that: Multiple Choice 

a. The longer the period, the greater the potential for a change in the ability of a company to repay its debt 

b. The longer the period, the greater the potential for a change in the ability of a company to repay its debt and broad-based change in interest rates will have a greater effect on long-term bonds 

c. A broad-based change in interest rates will have a greater effect on long-term bonds and the shorter the period, the greater the potential for a change in the ability of a company to repay its debt 

d. The shorter the period, the greater the potential for a change in the ability of a company to repay its debt 

e. A broad-based change in interest rates will have a greater effect on long-term bondsa

10. Which of the following is the furthest to the left of the security market line? Multiple Choice 

a. High quality stocks 

b. Risk-free rate

c. Corporate bonds 

d. Government bonds 

e. None of the choices are correct.