Exam 10: Securities Markets: Trading Financial Resources

Jack receives a considerable sum of money by selling his property. He decides to invest this sum in a diversified set of securities. He plans to invest in these securities and retain them for a long time. He is optimistic that eventually the overall market conditions will rise, thus giving him a high return sometime in the future. Jack is using the _____ investment strategy.

A health and fitness startup company goes for an initial public offering. For assistance, it enters into a firm commitment arrangement with an investment bank. As per the agreement, the investment bank itself will purchase all the shares at a specified price. This will guarantee that the company will receive a fixed amount of new funds. This scenario exemplifies a(n) _____.

Which of the following statements is true of credit unions?

List any two depository and nondepository institutions and describe their differences.

If Carl is a preferred stockholder at Cedia Inc., and Cedia goes out of business, Carl's claim on the firm's assets:

Abigail and Pamela both have stocks in the Rondante Group. However, if in the future the company goes out of business, Pamela will have a claim on the assets of the company before Abigail. Also, she is given higher priority when the company pays the dividends to all its stockholders. Unlike Abigail, Pamela is a _____.

Richard has been following information about a firm on a financial website. He has noticed that the firm's price-to-earnings ratio (P/E) has been steadily rising. Richard can conclude from this result that the company:

The Federal Reserve System was:

Institutional investors amass large pools of financial capital by accepting savings account deposits.

One drawback of exchange-traded funds (ETFs) is that investors:

Aaron buys 300 shares in a tobacco company. Within a year, he receives a capital gain on his stocks. This means that: