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IDC 4U0 Investing & Personal Finance Exam Format Study Guide
32 Questions
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IDC 4U0 Investing & Personal Finance Exam Format Study Guide

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Questions and Answers

What type of investment is a Real Estate Investment Trust (REIT)?

  • Stocks
  • Real Estate (correct)
  • Bonds
  • Money Market
  • Which market involves the issuance of new securities by companies?

  • Primary market (correct)
  • Secondary market
  • Money Market
  • Stock Market
  • What does FVIF stand for in finance?

  • Fixed Variable Interest Fund
  • Free Value Insurance Factor
  • Future Value Interest Factor (correct)
  • Foreign Value Investment Fund
  • What type of interest does not take into account the effect of compounding?

    <p>Simple Interest</p> Signup and view all the answers

    What type of brokerage typically offers personalized investment advice and research?

    <p>Full-Service Brokerage</p> Signup and view all the answers

    Which type of stock order specifies the price at which the investor wants to buy or sell a stock?

    <p>Limit Order</p> Signup and view all the answers

    Which type of investors are primarily organizations such as pension funds, insurance companies, and mutual funds?

    <p>Institutional investors</p> Signup and view all the answers

    Which type of analysis focuses on evaluating a stock's intrinsic value based on fundamental factors such as earnings, revenues, and assets?

    <p>Fundamental analysis</p> Signup and view all the answers

    What term refers to the total value of all outstanding shares of a publicly traded company?

    <p>Market capitalization</p> Signup and view all the answers

    Which equation is used to calculate the present value of a single dollar amount?

    <p>$PV = FV / (1 + r)^n$</p> Signup and view all the answers

    What is the formula for calculating market capitalization?

    <p>$Market Cap = Market Price * Total Shares$</p> Signup and view all the answers

    What does the beta of a stock measure?

    <p>Volatility of the stock relative to the market</p> Signup and view all the answers

    What is the primary focus of monetary policy?

    <p>Regulating interest rates and money supply</p> Signup and view all the answers

    Which term refers to the total assets minus total liabilities of a company?

    <p>$Net worth$</p> Signup and view all the answers

    What does standard deviation of returns measure in investment analysis?

    <p>$Market volatility$</p> Signup and view all the answers

    What does the Consumer Price Index (CPI) measure?

    <p>$Inflation rate$</p> Signup and view all the answers

    The Exam Length is 90 minutes.

    <p>False</p> Signup and view all the answers

    The exam will take place on Monday, Jan 29th, 2024, for Period 2.

    <p>False</p> Signup and view all the answers

    Students need to complete 10 out of 20 Multiple Choice questions in Part B.

    <p>False</p> Signup and view all the answers

    The exam room is on the 3rd Floor.

    <p>False</p> Signup and view all the answers

    Part A consists of True/False and Multiple Choice questions.

    <p>True</p> Signup and view all the answers

    Part A questions relate to course content including all terms, definitions, and concepts.

    <p>True</p> Signup and view all the answers

    An ordinary annuity involves an extra compounding period compared to an annuity due.

    <p>False</p> Signup and view all the answers

    The Consumer Price Index (CPI) measures the change in prices of a basket of goods and services over time.

    <p>True</p> Signup and view all the answers

    Fundamental analysis primarily evaluates a stock's intrinsic value based on market price movements.

    <p>False</p> Signup and view all the answers

    Institutional investors mainly include organizations such as pension funds, insurance companies, and mutual funds.

    <p>True</p> Signup and view all the answers

    Monetary policy is primarily focused on influencing the money supply and interest rates to achieve economic goals.

    <p>True</p> Signup and view all the answers

    The standard deviation of returns measures the volatility or risk of an investment.

    <p>True</p> Signup and view all the answers

    Market capitalization is calculated by multiplying the market price per share by the total number of outstanding shares.

    <p>True</p> Signup and view all the answers

    The beta of a stock measures its systematic risk compared to the market.

    <p>True</p> Signup and view all the answers

    Liabilities, assets, and owner's equity constitute the fundamental accounting equation.

    <p>True</p> Signup and view all the answers

    Capital gain refers to the increase in the value of an investment, while capital loss refers to the decrease in value.

    <p>True</p> Signup and view all the answers

    Study Notes

    Investment Types and Markets

    • A Real Estate Investment Trust (REIT) is a type of investment that allows individuals to invest in real estate.
    • The primary market involves the issuance of new securities by companies.

    Financial Concepts

    • FVIF stands for Future Value Interest Factor.
    • Simple interest does not take into account the effect of compounding.

    Brokerage and Investment Advice

    • A full-service brokerage typically offers personalized investment advice and research.

    Stock Orders and Investors

    • A limit order specifies the price at which the investor wants to buy or sell a stock.
    • Institutional investors are primarily organizations such as pension funds, insurance companies, and mutual funds.

    Stock Analysis

    • Fundamental analysis focuses on evaluating a stock's intrinsic value based on fundamental factors such as earnings, revenues, and assets.

    Company Valuation

    • The total value of all outstanding shares of a publicly traded company is referred to as market capitalization.
    • Market capitalization is calculated by multiplying the market price per share by the total number of outstanding shares.

    Time Value of Money

    • The present value of a single dollar amount can be calculated using the present value equation.
    • An ordinary annuity involves an extra compounding period compared to an annuity due.

    Risk and Volatility

    • The beta of a stock measures its systematic risk compared to the market.
    • The standard deviation of returns measures the volatility or risk of an investment.

    Monetary Policy and Economy

    • The primary focus of monetary policy is to influence the money supply and interest rates to achieve economic goals.
    • The Consumer Price Index (CPI) measures the change in prices of a basket of goods and services over time.

    Accounting and Finance

    • The fundamental accounting equation consists of liabilities, assets, and owner's equity.
    • Capital gain refers to the increase in the value of an investment, while capital loss refers to the decrease in value.

    Exam Details

    • The exam will take place on Monday, Jan 29th, 2024, for Period 2, and will last 90 minutes.
    • The exam room is on the 3rd Floor.
    • Part A consists of True/False and Multiple Choice questions, and Part B consists of 10 out of 20 Multiple Choice questions.

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    Description

    Prepare for the Jan. 2024 exam with this study guide detailing the exam format, dates, length, and content breakdown. Familiarize yourself with the exam structure to maximize your performance. Get ready for the True/False section and more.

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