Chapter 9

Kasper Hovannisian

Chapter 9

1. The likelihood of an occurrence of an unwanted event is:

A. Investing

B. Risk

C. Opportunity Cost

D. Financial Risk

2. The value of the next best alternative investment when faced with mutually exclusive investment choices is:

A. Opportunity Cost

B. Liquidity Risk

C. Appreciation

D. Tax Shelter

3. What is the use of borrowed funds by the investor with the anticipation of increasing investment returns?

A. Spread

B. Appreciation

C. Leverage

D. Inflation

4. Investing in a variety of assets to spread risk is Diversification.

T / F

5. Oligopoly is a control over a market by a single supplier.

T / F Oligopoly is a few suppliers with control over a market. Monopoly is a single supplier that has control over a market.

6. Psychic benefit is the pride associated with real property ownership.

T / F Pride of ownership is the pride that goes with real property ownership where psychic benefit is a perk to owning real property.

7. An increase in normal prices is known as inflation.

T / F

8. The increase in an assets value is known as depreciation.

T / F An increase in an assets value is known as appreciation.