Which of the Following Statements Is True Regarding Effective Investment

question 123

Multiple Choice

Which of the following statements is true regarding effective investment planning?

• A)When establishing an investment program, you should begin by monitoring your investments.
• B)When you are choosing an investment, you should examine only the interest rate risk factor associated with each investment.
• C)When establishing an investment program, you should examine the potential return offered by different investment alternatives.
• D)Leave the financial planning to the professionals.
• E)There is no need to monitor your investments after you have made your investment decision.

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Definitions:

Cash Flows

The total amount of money being transferred into and out of a business, providing insights into its operational efficiency and financial health.

Consolidated Net Income

The total amount of net income earned by a parent company and its subsidiaries, presented as a single figure after eliminating inter-company transactions.

Bonds Payable

Long-term debts issued by corporations or governmental units, represented by formal certificates obligating the issuer to pay interest and repay principal at a specified maturity date.

Interest Expense

The cost incurred by an entity for borrowed funds, including loans, bonds, or lines of credit, typically shown as an expense on the income statement.