COPYRIGHTED MATERIAL
LET’S PRACTICE
Name: _____________________________________________________________________________
12. Jason has a passion for old comic books. He buys them every chance that he gets. His parents have told him numerous times that he needs to stop spending so much money on pointless items and start investing in meaningful things like stocks and bonds. Are Jason’s parents right? What are the risks of investing in collectibles? Explain your answer. _ ____________________________________________________________________ _ ____________________________________________________________________ _ ____________________________________________________________________ 13. Currently, the long term capital gain tax rate is ___%; the short term capital gain tax is ___% PRODUCT PREVIEW a. 25; 39.9 b. 15; 39.9 c. 50; 22.5 d. 39.9; 15 14. Seojun purchased a number of stocks she expected to appreciate in value. Her goal was to sell the stocks after they appreciated and earn $500. She calculated this to include a 15% capital gains tax. She held the stocks just under a year and then sold them at a price that should have earned over $500. However, she fell several hundred dollars short of her goal. What did Seojun do wrong? Explain. _ ____________________________________________________________________ _ ____________________________________________________________________ _ ____________________________________________________________________ 15. Alison owned a bond with a coupon rate of 3%. Interest rates fell. Will the value of Alison's bond rise or fall? Why? a. rise, because her higher coupon rate makes the bond more attractive to investors b. fall because her bond must be discounted to reflect the current interest rate 16. What is a commodity? Provide 3 examples. Why would a manufacturer enter into a futures contract? _ ____________________________________________________________________ _ ____________________________________________________________________ _ ____________________________________________________________________ 17. T F Mutual funds are a common part of a typical retirement plan’s investment portfolio.
2 PTS ___
2 PTS ___
2 PTS ___
1 PT ___
5 PTS ___
1 PT ___
Chapter 11 | Investing 101 216
Made with FlippingBook - Online catalogs