Question

A comprehensive budget may include any of the following components EXCEPT __________.

Select one:

a. a specialized budget.

b. a tax budget.

c. a cash flow statement.

d. an operating budget.

e. a capital budget.

Question 18

Investment risks include all the following EXCEPT __________.

Select one:

a. default risks.

b. economic risks.

c. industry and company risks.

d. asset class risks

e. market risks.

Question 19

A kind of annuity that consists of cash flows of equal amounts occurring at regular intervals and that continues indefinitely is __________.

Select one:

a. a perpetuity.

b. the rate of compounding.

c. interest from bonds.

d. the minimum value kind.

e. the time value of money.

Question 20

Giving someone the unlimited right to make legal and financial decisions on your behalf is __________.

Select one:

a. a testamentary trust.

b. naming an executor.

c. durable power of attorney.

d. a stated dollar amount will.

e. a health care proxy.

Question 21

A fund of real estate holdings that can be privately held or publicly traded on an exchange is a __________.

Select one:

a. syndicate.

b. limited partnership.

c. real estate investment trust.

d. direct investment fund.

e. mortgage-backed fund.

Question 22

Recession and inflation have decreased the value of your investments. This is an example of __________.

Select one:

a. economic risk.

b. industry risk.

c. company risk.

d. asset class risk.

e. market risk.

Question 23

Examples of annuities include all the following EXCEPT __________.

Select one:

a. savings plans.

b. layaway purchases.

c. mortgages.

d. one-time cash flows.

e. retirement plan payouts.

Question 24

A period of declining productivity lasting less than half a year is called __________.

Select one:

a. the gross domestic product.

b. a depression.

c. a recession.

d. an expansion.

e. a contraction

Question 25

An investment policy statement outlines __________.

Select one:

a. an investor’s return objectives, risk preferences, and constraints.

b. an investment advisor’s approach to applying portfolio theory.

c. an institution’s goals and investment decisions.

d. an investment firm’s disclosures to clients.

e. a company’s disclosures to investors.

Question 26

The time value of money is an important concept in __________.

Select one:

a. determining the frequency of cash flows.?

b. valuing a series of future cash flows.

c. predicting discount rates.

d. adding the number of cash flows.

e. identifying the amount of cash flows.

Question 27

You insure your dependents against financial hardship after your death through __________.

Select one:

a. estate taxes.

b. long-term disability insurance.

c. life insurance.

d. a flexible savings account.

e. private mortgage insurance.

Question 28

The costs of leasing are __________.

Select one:

a. the down payment

b. the lease payments.

c. the buyout.

d. a. and b.

e. a., b., and c.?

Question 29

Your risk tolerance represents __________.

Select one:

a. your wealth or net worth.

b. the amount of money you stand to lose.

c. your ability or willingness to take chances.

d. the amount of time separating you from your money.

e. your return objective.

Question 30

A budget for short-term goals involving recurring items is called a/an __________.

Select one:

a. operating budget.

b. comprehensive budget.

c. capital budget.

d. a. and b.

e. a., b., and c.

Question 31

The purpose of pro forma financial statements is to show __________.

Select one:

a. projected future value.

b. consequences of choices.

c. scenarios for financial planning.

d. a. and b.

e. a., b., and c.

Answer 1

As per rules I will answer the first 4 subparts of the question

17: Cash flow statement

It is not a budget but a synopsis of cash inflows and outflows of the business. The other budgets are included in the comprehensive budget.

18:Asset class risk.

This is specific to portfolio. Investment carries the risk of default by issuer, risk of changing economy, risk that the company or industry may not have enough profits, and risk of changes in market situations (interest rate risk, equity risk, currency risk and commodity risk.)

19: Perpetuity

Rate of compounding is the rate of interest. Interest of bonds is the return from bonds. Minimum value kind and time value of money do not refer to annuity. Annuity is a series of equal cash flows and since it is perpetual in this case, it is called a perpetuity.

20. naming an executor

Naming an executor means giving unlimited power to the trustworthy person to carry out the terms of your will. A testamentary trust is a trust in a will distributing the estate proceeds to the beneficiary. A durable power of attorney is the right given in case of mental incapacitation of a person. A stated dollar amount will restricts the rights to the dollar amount stated and A healthcare proxy is a right given to make only health related decisions.