Question

In: Economics

1. The ease with which an investment can be converted into cash is called: a. convertibility....

1. The ease with which an investment can be converted into cash is called:

a.

convertibility.
b.

liquidity.
c.

profitability.
d.

exchangeability.
e.

redemption value.

2. The goals of monetary policy as controlled by the Federal Reserve are continue economic growth, full employment and:

a.

minimal tax rates for individuals.
b.

low interest rates.
c.

stable prices.
d.

no inflation.
e.

low consumer goods prices.

3. Rather than invest in the stock of just one or two companies, you purchase a variety of different types of investments in order to minimize risk. This is known as:

a.

dollar-cost averaging.
b.

investment apportionment.
c.

asset allocation.
d.

asset turnover.
e.

insider trading.

4. Robert has been saving his money and decides he wants to invest it. Which of the following is considered the most speculative?

a.

Derivatives
b.

A bank account
c.

Corporate bonds
d.

Real estate
e.

Preferred stock

Solutions

Expert Solution

1 Answer :- ( B) liquidity

Explanation:- liquidity refers to easily convertible in cash. so liquid assets means an investment which will easily convertible into cash. such as inventories. so The ease with which an investment can be converted into cash is called liquidity.

2 answer:- (C) stable price

Explanation:- The goals of monetary policy as controlled by the Federal Reserve are continue economic growth, full employment and stable price. because when price are considered stable when consumers and businesses don't have to worry about rising or falling prices when making plans.

3 Answer :- (C) Asset Allocation

Explanation:- Rather than invest in the stock of just one or two companies, you purchase a variety of different types of investments in order to minimize risk. This is known as Asset allocation. because assets allocation reduce the risk by diversification.

4 answer :- (D) Real estate

explanation :- real estate is most speculation because it's may be earn high profit by selling but also it's high risk

Rahul Sunny answered 7 months ago
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