Question 1

The index which gives equal weight to every company included,and is therefore not dominated by any single company,is the:

Accepted Answer

A) Dow Jones Composite Average. 
B) Standard & Poor's 400 Index. 
C) The Value Line Average. 
D) American Stock Exchange Index. 
E) Dow Jones World Index. 
A) Dow Jones Composite Average. 
B) Standard & Poor's 400 Index. 
C) The Value Line Average. 
D) American Stock Exchange Index. 
E) Dow Jones World Index.

Question 2

Commissions charged by stock brokers tend to vary among different classes of brokers.

Accepted Answer

A) True 
 B)False

Question 3

The base period for the Standard & Poor's Stock Indexes is 1957-58.

Accepted Answer

A) True 
 B)False

Question 4

The difference between a cash account and a margin account is:

Accepted Answer

A) a margin account allows the investor up to five days to pay for the entire purchase. 
B) a cash account gives the investor a 2% discount if they pay within 10 days,or the investor has to pay the entire amount within 30 days (2/10 net 30). 
C) a margin account allows the investor to borrow a percentage of the purchase price from the brokerage firm. 
D) a margin account is less risky to the investor. 
E) a cash account requires the stock be kept registered in street name,and a margin account allows the securities to be delivered to the customer. 
A) a margin account allows the investor up to five days to pay for the entire purchase. 
B) a cash account gives the investor a 2% discount if they pay within 10 days,or the investor has to pay the entire amount within 30 days (2/10 net 30). 
C) a margin account allows the investor to borrow a percentage of the purchase price from the brokerage firm. 
D) a margin account is less risky to the investor. 
E) a cash account requires the stock be kept registered in street name,and a margin account allows the securities to be delivered to the customer.

Question 5

The Dow Jones Composite index combines the Dow Jones Industrial,Transportation,and Utility averages into an index of 65 stocks.

Accepted Answer

A) True 
 B)False

Question 6

The tax rate that specifically applies to each new dollar of income is the:

Accepted Answer

A) marginal tax rate. 
B) average tax rate. 
C) short-term capital gains tax rate. 
D) long-term capital gains tax rate. 
A) marginal tax rate. 
B) average tax rate. 
C) short-term capital gains tax rate. 
D) long-term capital gains tax rate.

Question 7

The Standard & Poor's Indexes are price-weighted indexes.

Accepted Answer

A) True 
 B)False

Question 8

The Value Line Average reflects changes in stock prices,rather than value of shares outstanding.

Accepted Answer

A) True 
 B)False

Question 9

You are said to be long in a security if you purchase the security.

Accepted Answer

A) True 
 B)False

Question 10

Korean stock prices are measured by the Nikkei 225 average.

Accepted Answer

A) True 
 B)False

Question 11

The Russell 2000 measures performance of the 2000 largest stocks,based on market value.

Accepted Answer

A) True 
 B)False

Question 12

An investor is in a 35% tax bracket for normal (ordinary)income.During the course of the year,he received $5,000 in dividends and had $15,000 capital gains on stock he had held for 19 months.How much will his total tax be on this investment-related income?

Accepted Answer

The answer of An investor is in a 35% tax...

Question 13

Assume the following five companies are used in computing an index (there have been no stock splits during this time). $\begin{array}{ccc} 
&& \text { Base Period } & \text { Current Period } \
&\text { Shares } & \text { January 1, 1977 } & \text { December 31, 2004 } \
\text { Company }&\text { Outstanding } & \text { Market Price } & \text { Market Price }\\hline
\text { A } & 2,000 & \$ 2.00 & \$ 14.00 \
\text { B } & 6,000 & 6.00 & 18.00 \
\text { C } & 5,000 & 9.00 & 23.00 \
\text { D } & 8,000 & 10.00 & 5.00 \
\text { E } & 1,000 & 13.00 & 40.00
\end{array}$ (a)If the index is price-weighted,what will be the value of the index on Dec.31,2004?
(b)Using the same data from the above table,determine the index value if the index is calculated on a value-weighted basis.

Accepted Answer

The answer of Assume the following five companies are used...

Question 14

If an investor is in a 34% tax bracket and has held a stock for two years,the applicable tax rate that will apply to dividends is:

Accepted Answer

A) 15%. 
B) 20%. 
C) 28%. 
D) 34%. 
A) 15%. 
B) 20%. 
C) 28%. 
D) 34%.

Question 15

Tax rates that apply to income within a given tax bracket are referred to as marginal tax rates.

Accepted Answer

A) True 
 B)False

Question 16

Performance in the bond market is usually gauged by:

Accepted Answer

A) indexes and averages. 
B) interest rate movements. 
C) yield curve changes. 
D) B and C 
A) indexes and averages. 
B) interest rate movements. 
C) yield curve changes. 
D) B and C

Question 17

If a stock is sold short,the equity in the investor's account will go up if the stock

Accepted Answer

A) price goes down. 
B) price goes up. 
C) is split 2 for 1. 
D) A and C 
A) price goes down. 
B) price goes up. 
C) is split 2 for 1. 
D) A and C

Question 18

The Dow Jones Industrial Average is not the most accurate market measure,because of its blue-chip stock composition,and its bias toward high-priced stocks.

Accepted Answer

A) True 
 B)False

Question 19

Good till canceled (GTC)orders expire automatically after a set period of time.

Accepted Answer

A) True 
 B)False

Question 20

The Standard & Poor's 500 Stock Index is widely followed by professional money managers as a measure of broad stock market activity.

Accepted Answer

A) True 
 B)False

Exam 3: Participating in the Market

The index which gives equal weight to every company included,and is therefore not dominated by any single company,is the:

Commissions charged by stock brokers tend to vary among different classes of brokers.

The base period for the Standard & Poor's Stock Indexes is 1957-58.

The difference between a cash account and a margin account is:

The Dow Jones Composite index combines the Dow Jones Industrial,Transportation,and Utility averages into an index of 65 stocks.

The tax rate that specifically applies to each new dollar of income is the:

The Standard & Poor's Indexes are price-weighted indexes.

The Value Line Average reflects changes in stock prices,rather than value of shares outstanding.

You are said to be long in a security if you purchase the security.

Korean stock prices are measured by the Nikkei 225 average.

The Russell 2000 measures performance of the 2000 largest stocks,based on market value.

An investor is in a 35% tax bracket for normal (ordinary)income.During the course of the year,he received $5,000 in dividends and had $15,000 capital gains on stock he had held for 19 months.How much will his total tax be on this investment-related income?

If an investor is in a 34% tax bracket and has held a stock for two years,the applicable tax rate that will apply to dividends is:

Tax rates that apply to income within a given tax bracket are referred to as marginal tax rates.

Performance in the bond market is usually gauged by:

If a stock is sold short,the equity in the investor's account will go up if the stock

The Dow Jones Industrial Average is not the most accurate market measure,because of its blue-chip stock composition,and its bias toward high-priced stocks.

Good till canceled (GTC)orders expire automatically after a set period of time.

The Standard & Poor's 500 Stock Index is widely followed by professional money managers as a measure of broad stock market activity.

The Investment Setting

Security Markets

Investment Companies: Mutual Funds, exchange-Traded Funds, closed-End Funds, and Unit Investment Trusts

Economic Activity

Industry Analysis

Financial Statement Analysis

Efficient Markets and Anomalies

Behavioral Finance and Technical Analysis

Bond and Fixed-Income Fundamentals

Principles of Bond Valuation and Investment

Convertible Securities and Warrants

Commodities and Financial Futures

Stock Index Futures and Options

A Basic Look at Portfolio Management and Capital Market Theory

Duration and Bond Portfolio Management

International Securities Markets

Investments in Real Assets

Alternative Investments: Private Equity and Hedge Funds

Measuring Risks and Returns of Portfolio Managers

a Comprehensive Analysis for Real Estate Investment Decisions

the Makeup of Institutional Investors

Filters