30 Questions
What financial instrument involves pooling of investors' money as evidenced by certificates issued by trustee banks?
Mutual funds
Which investment option is considered a low-risk form of marketable securities and is made up of interest-bearing promissory notes issued by big firms?
Derivatives
What refers to the right, but not the obligation, to buy or sell something at a specified price and time?
Futures contracts
Which form of investment involves interest-bearing certificates of indebtedness issued by an organization?
Bonds
What type of contracts involve commitments to trade a given asset at a set price on a fixed date?
Futures contracts
Which investment option generally refers to diamonds due to their rarity and appreciation in value?
Precious Stones and metals
Which of the following best describes an individual with limited financial resources?
They would prefer to invest in low-risk, fixed-income instruments like time deposits and treasury bills
What is the primary purpose of laddered investing?
To align investment maturities with expected cash needs or planned expenses
What best defines a short-term time horizon in investing?
1 year or less
Which of the following is an example of an offensive investment?
Stock investments
What is the primary responsibility of a portfolio manager?
Making investment decisions for an individual or entity
How are financial markets typically classified?
Money markets and capital markets
What type of bonds can be exchanged for other securities of the issuing company?
Convertible bonds
Which bonds are subject to redemption by the issuing company before the maturity date?
Callable bonds
What type of bonds have no periodic interest payments?
Zero coupon bonds
Which bonds are considered risk-free investments?
Government securities
What type of stocks can only be bought by Filipino citizens?
Class A stocks
Which type of stocks are preferred by investors for their easy marketability?
Listed stocks
What is the primary purpose of investment portfolio management?
To define investment objectives and adopt strategies to optimize results while considering risks
According to the 'Rule of 72', what does the number 72 represent?
The number of years it takes to halve the purchasing power of a monetary unit
What is the main difference between a savings account and a time deposit?
Savings accounts allow for immediate withdrawal of funds, while time deposits have a fixed length of deposit period
What is the primary purpose of the 'Future Value of 1 After n Periods' concept?
To calculate the value of a single lump-sum investment over time
What is the primary purpose of the 'Future Value of an Annuity of 1 for N Periods' concept?
To calculate the accumulated amount of periodic contributions or additional investments and the earnings
How is 'Investible Cash' defined in the context of investment portfolio management?
The accumulated amount of periodic contributions or additional investments and the earnings
What is the main purpose of credit securities?
To raise funds for the issuing corporation
Which of the following is NOT a key factor to consider when investing in credit securities?
Dividend yield
What is the main difference between long-term and short-term investment in bonds?
Short-term bonds can be sold on the stock exchange, while long-term bonds cannot
Which type of bond is secured by the equipment of the issuing company?
Equipment trust bonds
What is the main difference between straight bonds and serial bonds?
Straight bonds mature entirely at one time, while serial bonds mature in installments
Which type of bond is secured by the securities invested in by the issuing company?
Collateral trust bonds
Explore key concepts from Chapter 1 of Investment Portfolio Management, such as financial soundness and the impact of inflation on the value of money. Learn about investment management defined as the process of setting objectives, implementing strategies, and evaluating performance. Understand the meaning of investments and investment portfolios.
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