1). All of the following statements are false except
an investment bank is a financial firm that assists organizations in raising funds.
a corporation often deposits excess cash in an investment bank.
an investment bank provides checking services for large corporations.
most investment banks help investors buy and sell a corporation's stock.
under current laws, an investment bank provides services to individuals but cannot provide banking services to corporations.
2). (TCO 5) Dave Harris has just purchased a bond with a face value of $1,000 that pays 6%. The purchase price of the bond was $900, and the bond will mature in 5 years. What is the yield to maturity for this bond?
| 9.8% 3) (TCO 5) A characteristic of serial bonds is that they | will pay no interest payments. | | will have varying issue dates. | | will have a series of maturity dates. | | cannot be called. will all mature 10 years from the date of issue. 4). (TCO 3) All of the following are disadvantages of leasing a vehicle except | automatic ownership interest in the car. | | unlimited mileage on the car. | | no need to meet credit requirements. | | lease payments are likely to be lower than loan payments. | | All of the other answers are advantages. 5). (TCO 4) John Brown owns a home in Oakland, California and because of the risk of earthquakes, he decides to purchase _____ to cover potential losses. | building and other structures | | additional living expenses | | specialized coverage 6). (TCO 4) If Mark Wright obtains a permanent disability as a result of an injury on the job, most likely he will receive _____ as a source of disability income. | an individual insurance policy | | his health insurance policy 7). (TCO 4) A(n) _____ is a document attached to an insurance policy that modifies coverage by adding or deleting a specified condition. | incontestability clause 8). (TCO 6) The Capitalist Mutual Fund's net asset value is $28.25. The fund has liabilities of $3 million and 1,600,000 shares have been issued. What is the value of the fund's portfolio? 9). (TCO 6) A benefit associated with an investment in a real estate limited partnership is that the investor | does not have to worry about capital gains tax. | | does not have to pay federal income tax. | | does not have to pay state income tax. | | can invest in a shopping center or large building by investing as little as $5,000. | | faces an investment that is very liquid. 10) (TCO 6) Chuck owns a home worth $140,000, a car valued at $30,000, and miscellaneous assets worth $7,500. He owes $75,000 on the home and $12,000 on the car, and has no other debts. His retirement account, in which he is fully vested, contains $17,500 in mutual funds. He is insured with a $250,000 term life insurance policy. What is his net worth? | | | | | 11). (TCO 7) Brenda wants to leave a message of encouragement to her grandchildren just in case something happens to her in the near future. She would be interested in preparing a(n) | durable power of attorney. | | letter of last instruction. | | |
12). (TCO 7) Marion would be acting in the capacity of a(n) _____ if she is selected to manage the assets of her 16-year-old niece until the niece reaches the age of 21.
