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Explore the world of investments, covering stocks, bonds, real estate, and more, to help make informed financial decisions and grow your wealth.
What kind of stock gives you money but no vote?
On January 1, 2009, Cart Companypurchased Fae Company 9% bonds with a face amount of P4,000,000 forP3,756,000 to yield 10%. The bonds are dated January 1, 2009, mature onDecember 31, 2018, and pay interest annually on December 31. The cart usesthe interest method of amortizing bond discount. In its incomestatement for the year ended December 31, 2009, what total amountshould Cart report as interest revenue from the long-term bondinvestment?
Why is compound interest more advantageous than simple interest when saving for retirement?
Spreading your money into a variety of asset classes, with multiple investments or indexes in each asset class, so that your investment is not reliant on the success of one company. Diversifying minimizes risk.
The practice of investing in a large variety of stocks, bonds, and/or funds as a way to as a way to reduce your overall risk
An example of what is a savings account is...
Which investment has the least liquidity?
Which best describes the role that government and business play in investments?
An investing tool for individuals to earmark funds specifically for their retirement
Jackson is a shareholder in a company. He recently received a portion of the company's profit. What is this called?
What is the Return in Year 2020?
Bonds issued by the U.S. Treasury with a maturity of more than 10 years; generally considered risk-free investments.
On January 1, 2009, Den Company purchased ten-year bonds with a face value of P1,000,000 and a stated interest rate of 8% per year, payable semiannually on July 1 and January 1. The bonds were acquired to yield 10%. Present value factors are as follows:Present value of 1 for 10 periods at 10% .386Present value of 1 for 20 periods at 5% .377Present value of an annuity of 1 for 10 periods at 10% 6.145Present value of an annuity of 1 for 20 periods at 5% 12.462The purchase price of the bonds is:
On January, 1 2008, Wayne Company bought15% of Parrot Company's ordinary shares outstanding for P6,000,000.Wayne appropriately accounts for this investment by the cost method.The following data concerning Parrot are available for the years endedDecember 31, 2008 and 2009: 2008 2009Net income 3,000,000 9,000,000Cash dividend paid None 10,000,000In its income statement for the year ended December 31, 2009, how much should Wayne report as income from this investment?
A raw material or primary agricultural product that can be bought and sold, such as copper or coffee
Vacation Company is a golf course developer that constructs approximately 5 courses each year. On January 1, 2009, Vacation Company agreed to buy 5,000 trees on January 1, 2010, to be planted in the courses it intends to build. In recent years, the price of trees has fluctuated wildly. On January 1, 2009, Vacation Company entered into a forward contract with a reputable bank. The price is set at P500 per tree.The derivative forward contract provides that if the market price on January 1, 2010, is more than P500, the difference is paid by the bank to Vacation. On the other hand, if the market price is less than P500, Vacation will pay the difference to the bank. This derivative forward contract was designated as a cash flow hedge. The market price on December 31, 2009, and January 1, 2010, is P800. The appropriate discount rate is 8%, and the present value of 1 at 8% for one period is .926.On December 31, 2009, Vacation Company shall recognize a derivative asset at:
What is the meaning of "inflation" in investing?
This bond is guaranteed to double in 20 years
A tax levied on profit from the sale of property or an investment
On April 1, 2009, Zen Company purchased40% of the outstanding ordinary shares of Ying Company for P10,000,000.On that date, Ying's net assets were P20,000,000 and Zen cannotattribute the excess of the cost of its investment in Ying over itsequity in Ying's net assets to any particular factor.Ying's2009 net income is P5,000,000. Zen plans to retain its investment inYing indefinitely. Zen accounts for its investment in Ying by theequity method. The maximum amount which could be included in Zen's 2009income before tax to reflect Zen's "equity in net income of Ying" is:
Bonds are considered to offer a guaranteed return, as they must be honored by law, but which is still a potential risk that investors face?
A federal program that provides monthly benefits to millions of Americans, including retirees, military families, surviving families of deceased workers, and disabled individuals
What is the meaning of "deflation" in investing?
Degree of uncertainty on how likely the investor is to make money on an investment
The type of investment account that helps people store their money for easy access if needed is known as a...
Reinvesting earned interest back into the principal to allow money to grow exponentially over time
On April 1, 2009, Sailor Companypurchased P2,000,000 face value, 9%, Treasury Notes for P1,985,000,including accrued interest of P45,000. The notes mature on July 1,2010, and pay interest semiannually on January 1 and July 1. Sailoruses the straight-line method of amortization. In its October 31, 2009balance sheet, the carrying amount of this investment should be:
Capital Markets allow companies to raise money via (you may choose more than one answer)
Putting money into more than one kind of investment at a time is called
On July 1, 2009, Dino Company purchased30,000 shares of Mammoth Company's 100,000 outstanding ordinary sharesfor P200 per share. On December 15, 2009, Mammoth paid P400,000 individends to its ordinary shareholders. Mammoth's net income for theyear ended December 31, 2009 was P1,200,000, earned evenly throughoutthe year. In its 2009 income statement, what amount of income from thisinvestment should Dino report?
What is superannuation?
The rate at which the price of goods increases and consumer purchasing power decreases over time
What is the Index in Year 2 (rounded to two decimal places)?
As an investor, if you wanted to diversify your retirement portfolio, which financial product should you select?
An individual retirement account that allows a person to set aside after-tax income up to a specified amount each year. Both earnings on the account and withdrawals after age 59½ are tax-free.
Changes in monetary policy occur when the Federal Reserve
Which questions should Robert ask himself before investing the $10,000 he inherited? Check all that apply.
A financial asset, such as a stock or a bond, that can be bought and sold in a financial market
What is the difference between a traditional IRA and a Roth IRA
Sushi Company owns 30,000 ordinary shares of Sashimi Company acquired on July 31, 2009, at a total cost of P1,100,000. On December 1, 2009, Sushi received 30,000 stock rights from Sashimi. Each right entitles the holder to acquire one share at P45. The market price of Sashimi's share on this date, ex-right, was P50 and the market price of each right was P5. Sushi sold its rights the same date at P5 a right less a P10,000 commission. The gain from the sale of the rights should be reported by Sushi at:
On January 1, 2009, Dryer Companyacquired as a long-term investment a 20% ordinary share interest inEpson Company. Dryer paid P7,000,000 for this investment when the fairvalue of Epson's net assets was P35,000,000. Dryer can exercisesignificant influence over Epson's operating and financial policies.For the year ended December 31, 2009, Epson reported net income ofP4,000,000 and declared and paid cash dividends of P1,600,000. How muchrevenue from this investment should Dryer report for 2009?
What is a large pool of money that several people put together, and that is usually invested in stocks and bonds and managed by a financial expert?
An entrepreneur keeps backup funds in a savings account so that if their business experiences a loss, they will be able to recuperate. What type of risk management is this an example of?
A mutual fund is a pool of money managed by a professional _____
What is the primary goal of investing?
An employer contribution made to their employees' 401(k) plan based on individual employee's contributions
When you purchase shares of Apple Inc., you are buying a small piece of _______ in the company.
An employer contribution made to their employees' 401(k) plan based on individual employee's contributions. An employee must contribute to the plan in order to receive a match from his/her employer.
What is Investment banking
The type of investment account that people create for after they finish working is known as a
What is a REIT (Real Estate Investment Trust)?
The overall collection of investments held by a person.
Money from the profits of a company that is paid out to its shareholders (typically, on a quarterly basis).
Crane Company purchased a P1,000,000 life insurance policy on its president, of which Crane is the beneficiary. Information regarding the policy for the year ended December 31, 2009, follows:Cash surrender value, 1/1 87,000Cash surrender value, 12/31 108,000Annual advance premium paid 1/1 40,000During 2009, the dividend of P6,000 was applied to increase the cash surrender value of the policy. What amount should Crane report as a life insurance expense for 2009?
The declared interest of the bond is called the ______ rate.
The technique of buying a fixed dollar amount of a particular investment on a regular schedule, regardless of its price. More shares are purchased when prices are low, and fewer shares are bought when prices are high.
Which of these are considered both short- and long-term investments? Check all that apply.
What is a derivative in investing?
The interest payment on a coupon bond. Example: A $1,000 bond with a 5% coupon would pay the bond investor $50 per year until maturity
On January 1, 2009, Russo Company purchased 5-year bonds with a face value of P8,000,000 and stated interest of 10% per year, payable semiannually on January 1 and July 1. The bonds were acquired to yield 8%. Present value factors are:Present value of an annuity of 1 for 1 period at 5% 7.72Present value of an annuity of 1 for 10 periods at 4% 8.11Present value of 1 for 10 periods at 4% 0.6756What is the purchase price of the bonds?
What is an income and expenditure account?
What is the role of a financial advisor in investments?
Which is true about investments and risk?
What is IPO
In what circumstance would a property insurance claim be rejected?
The images show what happened to two people who invested $1,000. Which investment advice would Gale most likely give to Alex?
What is an accredited investor in the context of investments?
What is the role of a custodial account in investing?
A bond, generally considered to be a risk-free investment, issued by the U.S. Treasury with a maturity of more than 10 years
On January 1, 2009, Ron Company purchased40% of the outstanding ordinary shares of Kim Company, payingP6,400,000 when the book value of the net assets of Kim Company equaledP12,500,000. The difference was attributed to equipment which had abook value of P3,000,000 and a fair market value of P5,000,000 and tobuilding which had a book value of P2,500,000 and a fair value ofP4,000,000. The remaining useful life of the equipment and building was4 years and 12 years, respectively. During 2009, Kim Company reportednet income of P5,000,000 and paid dividends of P2,500,000. Ron Companyshall report investment income for 2009 at:
A share of stock represents a fractional ownership of a company, which an individual buys in hopes of earning money and a company issues in order to raise funds.
Who is an entrepreneur?
Compared to a short-term investment, a long-term investment is generally considered
A total of $6000 is invested in two accounts. The interest rate on one account is 9%; on the second account, the interest rate is 6%. How much should be invested in each account so both accounts earn the same annual interest?
An account that lets individual investors trade stocks, bonds, mutual funds, and other investments
Once stocks are on the market, which best explains how their prices are set?
What does the term "blue chip" refer to in the context of stocks?
What is the role of a custodian in investments?
A financial asset—such as a stock or a bond—that can be bought and sold in a financial market.
On January 1, 2009, Ken Company purchased30% interest in Barbie Company for P2,500,000. On this date Barbie'sshareholders' equity was P5,000,000. The carrying amounts of Barbie'sidentifiable net assets approximated their fair values, except for landwhose fair value exceeded its carrying amount by P2,000,000. Barbiereported net income of P1,000,000 for 2009 and paid no dividends. Kenaccounts for this investment using the equity method. In its December31, 2009 balance sheet, what amount should Ken report as investment inassociate?
What is an annuity in the context of investments?
What is an IPO (Initial Public Offering)?
FD is called a Term deposit
An index that tracks 30 large, generally successful and reliable companies.
The annual interest payment on a bond, usually expressed as a percentage of its face value
When an insurance company needs to provide a payout, the money is removed from
On January 1, 2009, Tree Company borrowed P5,000,000 from a bank at a variable rate of interest for 4 years. Interest will be paid annually to the bank on December 31, and the principal was due on December 31, 2012. Under the agreement, the market rate of interest every January 1 resets the variable rate for that period and the amount of interest to be paid on December 31. In conjunction with the loan, Tree Company entered into a "receive a variable, pay fixed" interest rate swap agreement with another bank speculator.The interest rate swap agreement was designated as a cash flow hedge. The market rates of interest are:January 1, 2009 10%January 1, 2010 14%January 1, 2011 12%January 1, 2012 11%The present value of an ordinary annuity of 1 is as follows:At 14% for three periods 2.32At 12% for two periods 1.69At 11% for one period 0.90What is the derivative asset or liability on December 31, 2011?
What is the significance of due diligence in investment?
Why does John, a long-term investor, prefer to invest his money for a longer period instead of seeking short-term gains?
What is the meaning of a "cyclical stock" in investing?
On October 1, 2008, Pentel Company purchased 6,000 of the P1,000 face value, 10% bonds of Ophra Company for P6,600,000 including accrued interest of P150,000. The bonds, which mature on January 1, 2015, pay interest semiannually on January 1 and July 1. Pentel used the straight-line method of amortization and appropriately recorded the bonds as long-term investments. On Pentel's December 31, 2009 balance sheet, the bonds should be reported at:
What are the full forms of RD and FD
Recurring deposit is also a pyramid scheme
A retirement account, offered in some job sectors or companies, that an employer maintains to give an employee a fixed payout at retirement
What is a 401(k) plan?
_________ stocks give you both money and votes in company dealings
What type of investment provides diversification rather than only holding stocks and bonds, has less volatility than stocks, and does not move in tandem with stocks?
EE Bonds & I Bonds are similar in that. . .
Money from the profits of a company that is paid out to its shareholders, typically on a quarterly basis
What is Mutual fund?
An application that allows users to regularly save small sums of money
Please draw the equation to calculate 10% of $100.
Capital appreciation refers to
A collection of stocks and/or bonds, typically chosen and actively managed by an "expert" in exchange for a fee from each investor.
A bond's coupon rate is 6.5% and inflation rate was 4.0% in the same year. What is the bond's real return?
Measure the likelihood that a bondholder will be paid back. The higher the rating for a bond, the lower the coupon rate for that bond.
Why is FD better than RD ?
What does REIT stand for?
Which of these affect real investment value? Check all that apply.
What is a dividend in the context of investing?
What is the role of a fiduciary in investment?
A low-fee portfolio of stocks chosen to track or mimic a stock market index, thereby removing the human element of investing because no one is choosing the individual stocks
An investment with a stable and predictable history will most likely have
Which bond protects you from inflation?
Value of a mutual fund increases with fall in market
What is a hedge in investment?
What is a commodity in the context of investing?
A pension is a retirement account that an employer maintains to give an employee a fixed payout at retirement.
Business may invest___________
Which type of insurance policy would someone get to protect others only?
Taxes are often owed on
The process of setting money aside to increase wealth over time for long-term financial goals such as retirement
What is FPO
Which are common mistakes people make when investing? Check all they apply.
What is a value stock in investing?
Inflation is usually associated with (can be more than 1 right answer)
A measurement of the likelihood that a bondholder will be paid back
On October 1, 2009, York Company purchased 4,000 of the P1,000 face value, 10% bonds of Dell Company for P4,400,00 which includes accrued interest of P100,000. The bonds, which mature on January 1, 2016, pay interest semiannually on January 1 and July 1. York uses the straight-line method of amortization and appropriately records the bonds as a long-term investment. The bonds should be shown on York's December 31, 2009 balance sheet at:
What is a certificate of deposit (CD)?
If the nominal interest rate is 4.00% and the rate of inflation is 2.25%, what is the real interest rate?
Bonds issued by state and local governments which often have tax advantages for individual investors.
Stocks of a company fall if performance is good
What is a margin call in investing?
A group of financial instruments which have similar financial characteristics and behave similarly in the marketplace (like stocks, bonds, and cash)
On January 1, 2009, Cameron Company purchased bonds with the face value of P5,000,000 at the cost of P4,700,000. The stated interest is 10% payable annually every December 31. The bonds mature in 4 years or January 1, 2011.How much interest income should be reported by Cameron Company for the year ended December 31, 2009, using the effective interest method?
A collection of stocks and/or bonds combined into one fund which will be traded as a unit, typically chosen and actively managed by an "expert" in exchange for a fee from each investor
An individual retirement account that allows a person to set aside pre-tax income (up to a specified amount). Earnings are tax-deferred but taxes are paid when withdrawals are made beginning at age 59 1/2 or later (or earlier, with a 10% penalty).
Mutual Funds are owned by ________ , but are controlled by ________ .
The graph shows the effect of inflation.Approximately how much of the initial investment's value would be lost after 15 years at 3% inflation?
A market in which prices are falling, encouraging selling.
Congo Grill operates a chain of seafood restaurants. On January 1, 2009, Congo Grill determined that it would need to purchase 100,000 kilos of tuna fish on January 1 2010. Because of the volatile fluctuation in the price of tuna fish, on January 1, 2009, Congo negotiated a forward contract with a reputable financial institution for Congo Grill to purchase 100,000 kilos of tuna fish on January 1, 2010, at a price of P8,000,000 of P80 per kilo. This forward contract was designated as a cash flow hedge.On December 31, 2009, and January 1, 2010, the market price of tuna fish per kilo is P75. The appropriate discount rate is 6%, and the present value of 1 at 6% for one period is .943. Congo Grill uses the perpetual system.Congo Grill shall recognize a derivative liability on December 31, 2007, at:
On January 1, 2009, Fork Companypurchased 50,000 ordinary shares of Ovaltine Company for P3,600,000. OnDecember 31, 2009, Fork received 50,000 stock rights from Ovaltine.Each right entitles the holder to acquire on share for P85. The marketprice of Ovaltine's share was P100 immediately before the rights wereissued, and P90 a share immediately after the rights were issued. Forksold its rights on December 31, 2009 for P10 a right. Fork's gain fromthe sale of the rights is:
What are the range of investment options available
Which of the following types of investment accounts are considered "low return"?
What is the meaning of "diversifiable risk" in investing?
Which investment is the most risky?
On January 1, 2009, Bell Company paidP18,000,000 for 50,000 ordinary shares of Base Company which representa 25% interest in the net assets of Base. The acquisition cost is equalto the book value of the net assets acquired. Bell has the ability toexercise significant influence over Base. Bell received a dividend ofP35 per share from Base in 2009. Base reported net income of P9,600,000for the year ended December 31, 2009. In its December 31, 2009 balancesheet, Bell should report the investment in Base Company at:
Which best describes what a market index does?
A market where shares in corporations are bought and sold through an organized system
Which can be traded in a commodities market?
A couple has decided to increase their income from investments for when they retire in twenty years. Which is the best way they can accomplish that goal?
A bond, often having tax advantages for individual investors, issued by a state or local government which typically uses the loan to pay for public works to benefit its citizens
Derivatives are traditionally used for (you may choose more than one answer)
An index of 500 large cap companies chosen based on their size, industry, and other factors, used to represent the entire market
A retirement savings plan, sponsored through your employer who will often match your contributions, that allows an individual to save for retirement and have the savings grow while deferring taxes until funds are withdrawn
Which of the following is the LEAST risky investment?
The practice of putting a fixed amount into an investment over a period of time, regardless of the price of that investment
When you lay money out and hope to make a profit it is known as:
The nominal interest rate could best be described as the rate.
What can a savings account be used for?
What is dollar-cost averaging in investing?
What is the concept of "buy and hold" in investing?
Market value of all of a company's outstanding shares, calculated by multiplying the Current Share Price by Number of Shares.
A loan to a company or government is called...
Which characteristic is most important in determining an investment's level of risk?
You wish to purchase an apartment in one year's time. The price today is £200,000 and you expect inflation rate at 3% per annum. What is the apartment's price in one year's time?
What is the meaning of a "stop-loss order" in investing?
If an investor has a $5,000 pretax return, the state tax rate is 4.5%, and the federal tax rate is 22.0%, what is the real investment value?
The world's largest stock exchange, physically located in New York City
What is the role of a market maker in investments?
What is a 529 plan?
A type of investment fund that rebalances its asset mix over time based on a projected retirement year
If a company pays dividends on a stock, does that mean that the stock has appreciated in value? Why or why not?
Which statement best describes how inflation affects the value of investments over time?
What is the meaning of a "market order" in investing?
John is an investor and he is considering diversification. What does diversification mean in this context?
Interest rates generally reflect
What is similar about savings accounts and investments?
Complete the statement: "The riskier the investment, the ________________ the return."
A mutual fund is
The ratio of money gained or lost on an investment relative to the amount of money invested; also known as return on investment (ROI)
Which of the following statements are true?
What is a bond?
What does the term "long position" mean in trading?
What is the meaning of a "market correction" in investing?
Dividing an investment portfolio among different asset categories, such as stocks, bonds, and cash
A collection of stocks and/or bonds that are traded on securities exchanges. Unlike mutual funds, they can be traded throughout the day like an individual stock.
Why should Noah buy a mutual fund instead of one stock?
Fixed interest rate__________
What is the meaning of a "bear market" in investing?
What is an example of an investment?
Ali wants to borrow some money. What does interest rate mean to her?
Compared to high-risk investments, low- and medium-risk investments are in higher demand because they
The type of investment account that allows investors to own shares or have "partial ownership" in a particular company is known as (a)...
Bitcoin is an example
John is planning for his retirement and his financial advisor suggested an IRA. What is an IRA?
What is the meaning of a "bullish investor" in investing?
Mutual funds are independent on the market
The increase in the general price of goods and services in an economy over a period of time.
Which is always a cost when buying insurance?
Bulk Company purchased a P1,000,000 ordinary life insurance policy on its president. The policy year and Bulk's accounting year coincide. Additional data are available for the year ended December 31, 2009:Cash surrender value, 1/1 43,500Cash surrender value, 12/31 54,000Annual advance premium paid 1/1 20,000Dividend received 7/1 3,000Bulk Company is the beneficiary under the life insurance policy. How much should Bulk report as a life insurance expense for 2009?
What is an index fund?
What is one thing you should save for?
On July 1, 2009, Hillary Company purchased Esau Company's ten-year 12% bonds as a long-term investment, with a face value of P5,000,000 for P4,760,000. Interest is payable semiannually on January 1 and July 1. The bonds matured on July 1, 2013. Hillary uses the straight-line method of amortization. What amount of interest income should Hillary report in its income statement for the year ended December 31, 2009?
What is a mutual fund?
On January 1, 2009, Man Company adopted a plan to accumulate P5,000,000 by January 1, 2014. Man plans to make 5 equal annual deposits that will earn interest at 9% compounded annually. Man-made the first deposit on December 31, 2009. The future value of an ordinary annuity of 1 at 9% for 5 periods is 6.52. What amount must be deposited annually at the compound interest to accumulate the desired amount of P5,000,000?
Why did the tech startup 'Techie Corp.' issue stocks?
What is asset allocation in investment?
Justin wants to go to spend a month traveling Europe next summer but doesn’t have the money to do so. He’s thinking of investing the $700 he currently has saved in stock in his favorite restaurant in hopes of earning the money for the vacation. Why shouldn’t he do that?
What is a 403(b) plan?
What is the role of the SEC (U.S. Securities and Exchange Commission) in investing?
What does 're-basing an index' means?
A sudden and extreme downturn in stock performance/value
A sum of money paid to shareholders of a corporation out of its earnings.
If the Federal Reserve decreased the money supply, what would the effects be? Check all that apply.
What is a blue-collar investment?
Three Kings Company invested in shares of Eastern Company acquired as follows: NUMBER OF SHARES COST2007 22,500 1,800,0002008 37,500 3,300,000In2009, Three Kings Company received 60,000 rights to purchase Easternshare at P80. Five rights are required to purchase one share. At issuedate, rights has a market value of P4 each and share was sellingex-right at P96. Three Kings Company used rights to purchase 9,000additional shares of Eastern Company and allowed the rights notexercised to lapse. In determining the stock rights exercised, assumethe use of the first-in, first-out method. The amount to be debited toinvestment account for the purchase of the 9,000 additional shares is:
Mac Company made investment for 5 years at 12% per annum compounded semiannually to equal P7,160,000 on the date of maturity. What amount must be deposited now at the compound interest to provide the desired sum? Round off future value factor to two decimal places.
An individual retirement account that allows a person to set aside after-tax income up to a specified amount each year
What does the term "bonds rating" refer to in investing?
What is the significance of a "lock-up period" in investing?
Market value of a company's outstanding shares calculated by multiplying the current share price by number of shares outstanding
What is a target-date fund?
On February 15, 2009, Bart Companypurchased 20,000 shares of Homer Company's newly issued 6% cumulativeP75 par preference share capital for P1,520,000. Each share carried onedetachable share warrant entitling the holder to acquire at P10, oneordinary share of Homer Company. On February 15, 2009, the market priceof the preference share ex-warrant was P72 and the market price of theshare warrant was P8. On December 31, 2009, Bart sold all the sharewarrants for P205,000. The gain on the sale of the share warrants was:
Which factors can affect a stock's price? Check all that apply.
The ratio of money gained or lost on an investment relative to the amount of money invested; also known as return on investment (ROI).
How is a 401k different from an individual retirement account (IRA)?
If two people are invited to invest and become partners in a business, the business owners will then ________ the risk.
Imagine you are a financial analyst studying the stocks of Apple Inc. Apple Inc. would be classified as a large cap stock if its market value exceeds what amount?
A United States federal program of social insurance and benefits developed in 1935. The Social Security program's benefits include retirement income, disability income, Medicare and Medicaid, and death and survivorship benefits.
One's approach to markets based on a set of principles, beliefs, or experiences that drive trading and portfolio decisions.
Your risk tolerance for investing should be determined by these two factors:
What is a characteristic of Closed-End funds?
Which statement is true of the relationship between risk and return?
On January 1, 2009, Weller Companypurchased 10% of Pea Company's outstanding ordinary shares forP4,000,000. Weller is the largest single shareholder in Pea andWeller's officers are a majority of Pea's board of directors. Peareported net income of P5,000,000 for 2009 and paid dividends ofP1,500,000. In its December 31, 2009 balance sheet, what amount shouldWeller report as investment in Pea?
Real Estate is an example of....
_________ policy involves government changes to spending or taxation to affect the economy.
Profit from the sale of an asset, such as a stock or a bond, calculated by subtracting the price you initially paid from the price you then sold it for
What does owning stock give you?
Which of the following refers to Real Return?
What is an ETF (Exchange-Traded Fund)?
An asset is __________
The first time a company issues stock that may be bought by the general public.
What does diversification in investment refer to?
When you have money to invest and you are concerned with how much *extra* money you can earn, with which concept are you concerned?
Which investor is making a common error?
How can an insurance company make a profit by taking in premiums and making payouts?
On January 1, 2009, Tree Company borrowed P5,000,000 from a bank at a variable rate of interest for 4 years. Interest will be paid annually to the bank on December 31, and the principal was due on December 31, 2012. Under the agreement, the market rate of interest every January 1 resets the variable rate for that period and the amount of interest to be paid on December 31. In conjunction with the loan, Tree Company entered into a "receive a variable, pay fixed" interest rate swap agreement with another bank speculator.The interest rate swap agreement was designated as a cash flow hedge. The market rates of interest are:January 1, 2009 10%January 1, 2010 14%January 1, 2011 12%January 1, 2012 11%The present value of an ordinary annuity of 1 is as follows:At 14% for three periods 2.32At 12% for two periods 1.69At 11% for one period 0.90What is the derivative asset or liability on December 31, 2010?
William is not generally a risk-taker, but he knows he may need to step out of his comfort zone to make enough money for retirement.Which investment option would best meet William's needs?
The type of investment account where multiple people invest their money in a combination of stocks and bonds is known as a...
The second largest stock exchange in the world behind the NYSE
What is the meaning of a "bull market" in investing?
What is a portfolio in the context of investing?
Which statement best describes how an investor makes money off debt?
Who spreads awareness about mutual funds in india ?
In January 2009, Fatty Company acquired20% of the outstanding ordinary shares of David Company for P8,000,000.This investment gave Fatty the ability to exercise significantinfluence over David. The book value of the acquired shares wasP6,000,000. The excess of cost over book value was attributed to adepreciable asset which was undervalued on David's balance sheet andwhich had a remaining useful life of ten years.For the yearended December 31, 2009, David reported net income of P1,800,000 andpaid cash dividends of P400,000 and thereafter issued 5% stockdividend. What is the proper carrying value of Fatty's investment inDavid at December 31, 2009?
On January 1, 2009, Annie Companypurchased 20% of the outstanding ordinary shares of Duke Company forP4,000,000 of which P1,000,000 was paid in cash and P3,000,000 ispayable with 12% annual interest on December 31, 2010. Annie also paidP500,000 to a business broker who helped find a suitable business andnegotiated the purchase.At the time of acquisition, the fairvalue of Duke's identifiable assets and liabilities were equal to theircarrying values except for an office building which had a fair value inexcess of book value of P2,000,000 and an estimated life of 10 years.Duke's shareholders' equity on January 1, 2009 was P 13,000,0000.During2009, Duke reported net income of P5,000,000 and paid dividend ofP2,000,000. What amount of income should Annie Company report for 2009as a result of the investment?
Investors nearing retirement will typically shift their investment portfolios to include ________ risk investments.
What is the meaning of "compounding" in investment?
New York Stock Exchange -- the world's largest stock exchange.
An online wealth management service that provides automated, algorithm-based portfolio management advice without the use of human financial planners
Which is a commodity someone might invest in?
Why does insurance often provide "peace of mind"?
An individual retirement account that allows a person to set aside pre-tax income up to a specified amount each year
What does T-Bills stand for?
On January 1, 2009, Camelot Company established a sinking fund in connection with its issue of bonds due in 2014. A bank was appointed as an independent trustee of the fund. On December 31, 2009, the trustee held P364,000 cash in the sinking fund account representing P300,000 in annual deposits. How should the sinking fund be reported in Camelot's balance sheet on December 31, 2009?
On January 1, 2009, Riyadh Companypurchased serial bonds with the face value of P3,000,000 and stated 12%interest payable annually every December 31. The bonds mature at anannual installment of P1,000,000 every December 31. The rounded presentvalue of 1 at 10% for: One period 0.91 Two periods 0.83 Three periods 0.75What was the market price of the serial bonds on January 1, 2009?
On January 1, 2008, Tough Companyacquired 10% of Complex Company's ordinary shares outstanding forP6,000,000. Tough appropriately accounts for this investment by thecost method. Complex Company reported the following for the years endedDecember 31, 2008 and 2007: NET INCOME CASH DIVIDEND2008 400,000 02009 1,200,000 1,800,000In its income statement for the year ended December 31, 2009, Easy Company should report dividend income at:
Variable interest rate__________
What is one way in which bonds do not generate income for investors?
What does the term "liquidity" mean in the context of investments?
Julie wants to buy a car and is deciding how she should invest her money. To best meet her needs, she should
What is the primary reason to issue stock?
A market where shares in corporations are bought and sold through an organized system.
Most people prefer to pay health insurance premiums rather than pay out-of-pocket for medical expenses because
An index of 500 large cap companies chosen based on 8 factors, including market capitalization, location, and industry.
What type of stock pays dividends and consistently?
On January 1, 2009, Tree Company borrowed P5,000,000 from a bank at a variable rate of interest for 4 years. Interest will be paid annually to the bank on December 31, and the principal was due on December 31, 2012. Under the agreement, the market rate of interest every January 1 resets the variable rate for that period and the amount of interest to be paid on December 31. In conjunction with the loan, Tree Company entered into a "receive a variable, pay fixed" interest rate swap agreement with another bank speculator.The interest rate swap agreement was designated as a cash flow hedge. The market rates of interest are:January 1, 2009 10%January 1, 2010 14%January 1, 2011 12%January 1, 2012 11%The present value of an ordinary annuity of 1 is as follows:At 14% for three periods 2.32At 12% for two periods 1.69At 11% for one period 0.90What is the derivative asset or liability on December 31, 2009?
What is the role of dividends in investment?
What is stock market ?
What is the meaning of ROI in the context of investments?
What is risk tolerance in investing?
What is the meaning of a "short position" in investing?
The type of investment account that is created with the promise that the investor will earn significant interest on their money is known as a...
What is a stock?
What is a hedge fund?
A collection of financial investments like stocks, bonds, commodities, cash, and cash equivalents, including mutual funds and ETFs
Which of the following types of investments accounts are considered "higher risk"?
A market in which there is increased stock trading and rising stock prices
Interest rates are expressed as a percentage of
Which statements are true regarding an individual retirement account? Check all that apply.
What does the term "volatility" mean in investing?
Which is an example of a short-term investment?
An investment of $3,000 is made at a simple annual interest of 5%. How much must additional money be invested at an annual simple interest rate of 8% so that the total annual interest earned is 7.5 of the original amount you invested?
Eve Company owns 50,000 ordinary sharesof Blend Company, which has several hundred thousand shares publiclytraded. These 50,000 shares were purchased by Eve in 2007 for P100 pershare. On August 30, 2009, Blend distributed 50,000 stock rights toEve. Eve was entitled to buy one new share of Blend Company for P90cash and two of these rights. On August 30, 2009, each share had amarket value of P 132 ex-right, and each right had a market value ofP18. What cost should be recorded for each new share that Eve acquiredby exercising the rights?
What is the meaning of P/E ratio in investing?
Where do you buy and sell shares from?
What is real estate investment?
A retirement savings plan sponsored by an employer which lets workers save and invest a piece of their paycheck before taxes are taken out. Taxes aren't paid until the money is withdrawn from the account.
The Federal Insurance Contributions Act (FICA) is the federal law that requires an employer to withhold three separate taxes from the wages they pay their employees: a 6.2 percent Social Security tax;a 1.45 percent Medicare tax and beginning in 2013, a 0.9 percent Medicare surtax when the employee earns over $200,000.
What is the meaning of "capital preservation" in investing?
What is the meaning of "market capitalization" in investing?
What is the meaning of "liquidity risk" in investing?
A debt security in which the issuer (company or government) owes the holders (or investor) a debt and, depending on the terms of the bond, is obliged to pay the bondholder interest (the coupon) and/or to repay the principal at a later date, termed the bond maturity.
The second largest stock exchange in the world behind the NYSE.
Which is better
After he bought a new car, Nelson purchased car insurance. He must pay $75 each month for the plan.Later that month, Nelson caused a car accident when he lost control of his vehicle. He was required to pay the first $500 of his repair costs, and then the insurance company covered the rest.Read the passage about Nelson's car insurance.What is the $75 payment Nelson must make each month?
What is the meaning of "capital gain" in investing?
What is the role of a transfer agent in investments?
What is the significance of "book value" in investing?
Degree of uncertainty on how likely the investor is to make money on an investment.
What is a no-load mutual fund?
When you have money to invest and you are concerned with how safe your investment will be (so that you don't lose money), with which concept are you concerned?
In the world of investments, what is the term used to describe the potential for financial loss?
Cebuana Company made an investment of P5,000,000 at 10% per annum compounded annually for 6 years. What is the amount of the investment on the date of maturity? Round off future value factor to two decimal places.
___ on public offer
A share of the value of a company, which can be bought, sold, or traded as an investment and which gives the investor small partial ownership of the company
What is the definition of premium?
Interest earned on both the principal amount and any interest already earned.
What does the term "tax-advantaged account" mean in investing?
What is a trustee in investing?
A security in which the investor loans money to a company or government, which then pays regular interest to the bondholder and returns the principal on the bond's maturity date
What are the benefits of investing in Mutual Fund?
On January 1, 2009, Kent Companypurchased 20% of Luther Company's ordinary shares outstanding forP6,000,000. During 2009, Luther reported net income of P7,000,000 andpaid cash dividend of P4,000,000. The balance in Kent's investment inLuther Company account at December 31, 2009 should be:
The graph shows examples of investments with high and low liquidity.An investment with more liquidity would be ideal for someone who
Why should investors know the difference between nominal and real interest rates?
Seed Company bought 40% of Adam Company'soutstanding ordinary shares on January 1, 2009, for P4,000,000. Thecarrying amount of Adam's net assets at the purchase date totaledP9,000,000. Fair values and carrying amounts were the same for allitems except for plant and inventory, for which fair values exceededtheir carrying amounts by P900,000 and P100,000, respectively. Theplant has an 18-year life. All inventory was sold during 2009. During2009, Adam reported net income of P1,200,000 and paid a P200,000 cashdividend. What amount should Seed report in its income statement fromits investment in Adam for the year ended December 31, 2009?
Money set aside for unanticipated expenses or loss of income
List one reason why companies would like you to purchase stock
A low-fee portfolio of stocks chosen to track or mimic a stock market index, thereby removing the human element of investing.
What is a growth stock in investing?
Which type of investment is the least risky?
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