Question 1

The NASDAQ 100 includes high tech firms such as:

Accepted Answer

A) IBM,Oracle,and Cisco Systems. 
B) Microsoft,Intel,and Cisco Systems. 
C) Hewlett Packard,Cisco Systems,and Compaq. 
D) All of the above 
A) IBM,Oracle,and Cisco Systems. 
B) Microsoft,Intel,and Cisco Systems. 
C) Hewlett Packard,Cisco Systems,and Compaq. 
D) All of the above

Question 2

Which of the following is NOT a characteristic of the Dow Jones Industrial Average?

Accepted Answer

A) It includes only very high quality common stock 
B) It generally follows the trend of the market 
C) The companies included comprise over 25% of the market value of companies listed on the New York Stock Exchange 
D) It is a value-weighted average 
E) Dividends require adjustments to the divisor 
A) It includes only very high quality common stock 
B) It generally follows the trend of the market 
C) The companies included comprise over 25% of the market value of companies listed on the New York Stock Exchange 
D) It is a value-weighted average 
E) Dividends require adjustments to the divisor

Question 3

The Securities and Exchange Commission publishes a list of approved securities that may be borrowed against.

Accepted Answer

A) True 
 B)False

Question 4

Margin percentages are set by the Board of Governors of the Federal Reserve System.

Accepted Answer

A) True 
 B)False

Question 5

Trading through an online broker is generally cheaper than trading through a discount broker.

Accepted Answer

A) True 
 B)False

Question 6

Large,established companies make up the Dow Jones Industrial Average.

Accepted Answer

A) True 
 B)False

Question 7

The Dow Jones Industrial Average is not adjusted for stock splits.

Accepted Answer

A) True 
 B)False

Question 8

Companies having the greatest impact on the computation of the Dow Jones Averages and the Standard & Poor's Indexes have the ____________ and the ____________,respectively.

Accepted Answer

A) highest price;highest total market value 
B) highest total market value;highest price 
C) highest price;lowest liquidity 
D) greatest number of shares outstanding;highest price 
A) highest price;highest total market value 
B) highest total market value;highest price 
C) highest price;lowest liquidity 
D) greatest number of shares outstanding;highest price

Question 9

The Nikkei average relates to stock movements in what market?

Accepted Answer

A) Korea 
B) Japan 
C) Austria 
D) Australia 
E) China 
A) Korea 
B) Japan 
C) Austria 
D) Australia 
E) China

Question 10

The Standard & Poor's Midcap Index is composed of 500 middle-sized firms.

Accepted Answer

A) True 
 B)False

Question 11

The Wilshire 5000 index includes all stocks on the New York and American Stock Exchanges,and most active NASDAQ issues.

Accepted Answer

A) True 
 B)False

Question 12

A change in a high-priced stock's value has a greater impact on the Dow Jones Industrial Average than a change in a low-priced stock.

Accepted Answer

A) True 
 B)False

Question 13

Margin accounts are used by:

Accepted Answer

A) traders who think their long-run returns will be greater than the cost of borrowing. 
B) speculators who think their long-run returns will be greater than the cost of borrowing. 
C) investors who think their long-run returns will be greater than the cost of borrowing. 
D) All of the above 
A) traders who think their long-run returns will be greater than the cost of borrowing. 
B) speculators who think their long-run returns will be greater than the cost of borrowing. 
C) investors who think their long-run returns will be greater than the cost of borrowing. 
D) All of the above

Question 14

Minimum maintenance standards require that a margined investor always maintains the initial margin position.

Accepted Answer

A) True 
 B)False

Question 15

The divisor in the Dow Jones Industrial Average equals 30.

Accepted Answer

A) True 
 B)False

Question 16

Long-term capital gains are taxed as ordinary income.

Accepted Answer

A) True 
 B)False

Question 17

The margin requirement is associated with short selling.

Accepted Answer

A) True 
 B)False

Question 18

Securities must be kept in the street name of the brokerage if a margin account is used.

Accepted Answer

A) True 
 B)False

Question 19

A limit order can ensure that you will not pay above a given price in purchasing a stock or sell below a given price in selling a stock.

Accepted Answer

A) True 
 B)False

Exam 3: Participating in the Market

The NASDAQ 100 includes high tech firms such as:

Which of the following is NOT a characteristic of the Dow Jones Industrial Average?

The Securities and Exchange Commission publishes a list of approved securities that may be borrowed against.

Margin percentages are set by the Board of Governors of the Federal Reserve System.

Trading through an online broker is generally cheaper than trading through a discount broker.

Large,established companies make up the Dow Jones Industrial Average.

The Dow Jones Industrial Average is not adjusted for stock splits.

Companies having the greatest impact on the computation of the Dow Jones Averages and the Standard & Poor's Indexes have the ____________ and the ____________,respectively.

The Nikkei average relates to stock movements in what market?

The Standard & Poor's Midcap Index is composed of 500 middle-sized firms.

The Wilshire 5000 index includes all stocks on the New York and American Stock Exchanges,and most active NASDAQ issues.

A change in a high-priced stock's value has a greater impact on the Dow Jones Industrial Average than a change in a low-priced stock.

Margin accounts are used by:

Minimum maintenance standards require that a margined investor always maintains the initial margin position.

The divisor in the Dow Jones Industrial Average equals 30.

Long-term capital gains are taxed as ordinary income.

The margin requirement is associated with short selling.

Securities must be kept in the street name of the brokerage if a margin account is used.

A limit order can ensure that you will not pay above a given price in purchasing a stock or sell below a given price in selling a stock.

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

Companies having the greatest impact on the computation of the Dow Jones Averages and the Standard & Poor's Indexes have the and the ,respectively.