Tuesday, October 8, 2013

Chapter 9: Investing Activity

By Jordan Naffa

True & False Questions:
1.) Investing is the pursuit of a future return by delaying consumption and taking an anticipated, desired level of risk.
T/ F
2.)Risk is the likelihood of an occurrence if a wanted event.
            T/ F
3.) Management risk is the possibility that subpar managerial performance lowers the investor’s return.
T/ F
4.) Inflation risk is the risk that purchasing power of investment incomes and values does not keep up with the cost of other goes and services.
T/ F
5.) Liquidity risk is the risk that the investor cannot sell and convert the real estate investment to cash.
T/ F

Question & Answer:
6.) The term appreciation means the
            a. decrease in asset value over a certain period
            b. fixed cost in asset value over a certain period
c. increase in asset value over a certain period
d. decrease in asset value over an open ended period

7.) Opportunity cost is the ____________ when faced with mutually exclusive investment choice.
a. the best investment alternative
            b. next best investment alternative
c.  worst
d. Both a and b

8.) The term liquefying is the act of
a. Converting real estate into investment cash  
            b. Converting investment cash into real estate 
c. Converting investment cash into stocks
d. None of the above

1.) T,            2.) F,            3.) T,            4.) T,             5.) T,             6.) C,            7.) B,            8.) A

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