Question

1. Because it is the common denominator that we use to compare products and decide which ones we will buy, money functions as a(n):

a. commercial tool.

b. store of value.

c. measure of value.

d. medium of exchange.

e. accepted resource.

2.

Your grandmother left you $10,000 in her will with the specific request that you use this money for the down payment on a house. Since you're still in college, you know that buying a house is a long way off. When considering where to invest this money, the factor that is most impacting your investment decision is:

a. your investment horizon.

b. investment diversification.

c. asset allocation goals.

d. your liquidity needs.

e. your risk tolerance.

3. Which of the following would most likely be classified as a growthinvestment?

a. Certificate of deposit

b. Treasury notes

c. Mid-cap stocks

d. Municipal bonds

e. Savings account

4.

In order to reach goals of high dollar returns on your investments, what must you generally give up?

a. Risk

b. Liquidity

c. Diversification

d. Safety

e. Speculation

Answer 1

Answer(1): Measure of value is the correct option.

Money serves as unit of account that means other values are measured by money, that is one of the important functions of moeny.

Answer(2): Your investment horizon is the correct option.

Buying a house is a long term horizon for a person who is student now. His grand mother wants him to utilize the amount for down payment of the house, he will buy the house after some years. He can invest that $10000 into a secured alternative for long term.

Answer(3): Mid-cap stocks are considered the growth investment.

Mid cap stocks refer to the stocks of the companies that have medium size market capitalization, they tend to grow and perform in the market.

Answer(4): Speculation is the correct option.

If you want to earn higher returns, you must give up the speculation, you should be a long term investor and should have patience to get high dollar returns, you should not be speculative.