Terry Hamilton Has Just Received $30,000 from an Uncle Who

question 1

Multiple Choice

Terry Hamilton has just received $30,000 from an uncle who died and is trying to decide how to invest it.She has done some research has decided that about 30% of the money should go into large cap stocks,20% into medium cap stocks,15% into small cap stocks,10% into bonds,10% into foreign stock,and 15% into cash.She thinks that even if one area does not do that well,the rest will so that her overall return will be pretty good.What aspect of investing is Terry most concerned about?

• A)income
• B)return
• C)diversification
• D)liquidity
• E)investment growth

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Definitions:

Income Summary

An account used in the closing process, summarizing all revenues and expenses for a period, to transfer the net result to capital accounts.

Capital Account

A capital account is an account on a company's balance sheet that represents the equity investment of owners and shareholders.

Closing Entries

Journal entries made at the end of an accounting period to transfer the balances of temporary accounts to a permanent equity account.

General Ledger

A thorough collection of financial records that documents every financial transaction undertaken by a business.