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Question 1 of 10
1. Question
Which of the following statement is not true regarding Marketability risk?
Correct
Marketability risk is the relative ease with which a security may be bought or sold.
Incorrect
Marketability risk is the relative ease with which a security may be bought or sold.
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Question 2 of 10
2. Question
Which of the following statement is not true regarding the coefficient of determination?
Correct
It only affect a particular business or industry, and therefore can be avoided through diversification.
Incorrect
It only affect a particular business or industry, and therefore can be avoided through diversification.
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Question 3 of 10
3. Question
Which of the following statement is true regarding the Covariance?
Correct
If the two variables move together, they have a positive covariance; if they move apart, they have a negative covariance. Large numbers indicate a strong relationship, and small numbers a weak relationship.
Incorrect
If the two variables move together, they have a positive covariance; if they move apart, they have a negative covariance. Large numbers indicate a strong relationship, and small numbers a weak relationship.
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Question 4 of 10
4. Question
Which of the following statement is not true regarding the correlation coefficient?
Correct
The correlation coefficient measures the relationship of returns between the two stocks.
Incorrect
The correlation coefficient measures the relationship of returns between the two stocks.
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Question 5 of 10
5. Question
Which of the following step is not included in financial planning process?
Correct
Once the client has agreed to a plan, the financial planner will move to implement that plan.
Incorrect
Once the client has agreed to a plan, the financial planner will move to implement that plan.
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Question 6 of 10
6. Question
Dave bought TRE stock 20 years ago for $50 per share. The stock had a market value of $35 per share when Dave gifted it to his daughter Nina. When the stock falls to $25, Nina decides to sell it to
purchase a new car. For tax purposes, what is the loss recognized per share for Nina?Correct
Under the double basis rule (for gifts below fair market value), Nina will have two bases in the stock. Her loss basis will be $35 and her gain basis will be $50. If the stock falls to $25 when she sells it, she will recognize a loss of $10 per share ($35-$25). However, for Dave, there is a permanent disallowance of his loss, as the stock was gifted below fair market value.
Incorrect
Under the double basis rule (for gifts below fair market value), Nina will have two bases in the stock. Her loss basis will be $35 and her gain basis will be $50. If the stock falls to $25 when she sells it, she will recognize a loss of $10 per share ($35-$25). However, for Dave, there is a permanent disallowance of his loss, as the stock was gifted below fair market value.
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Question 7 of 10
7. Question
Which of the following statement is true regarding the C Corporation?
Correct
The income earned by a C corporation is subject to double taxation.
Incorrect
The income earned by a C corporation is subject to double taxation.
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Question 8 of 10
8. Question
Which of the following statement is not true regarding negotiable instruments?
Correct
Public misdeeds are a violation of the individual’s compact with society and are called crimes, while private misdeeds are violations of the rights of another person and are known as torts.
Incorrect
Public misdeeds are a violation of the individual’s compact with society and are called crimes, while private misdeeds are violations of the rights of another person and are known as torts.
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Question 9 of 10
9. Question
Which of the following is not the requirement of a valid contract to exist?
Correct
The offeror and offeree must both be in a situation where they are capable of entering into such a contract.
Incorrect
The offeror and offeree must both be in a situation where they are capable of entering into such a contract.
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Question 10 of 10
10. Question
Why an independent variable is adjusted?
Correct
An independent variable is adjusted to see how much change it will cause in the dependent variable.
Incorrect
An independent variable is adjusted to see how much change it will cause in the dependent variable.