Question 1

The documents signed when a customer opens a brokerage account

Accepted Answer

A)  establish a legal relationship between the customer and the brokerage firm. 
B)  may be signed by a minor child provided that the money being invested belongs to the child. 
C)  serve as an informal relationship between the customer and the stockbroker. 
D)  limit the customer to dealing only through that brokerage firm. 
A)  establish a legal relationship between the customer and the brokerage firm. 
B)  may be signed by a minor child provided that the money being invested belongs to the child. 
C)  serve as an informal relationship between the customer and the stockbroker. 
D)  limit the customer to dealing only through that brokerage firm. A

Question 2

Both the Dow Jones Industrial Average and the Standard and Poor's 500 Index are constructed to reflect the value of shares in large, mid- size and smaller companies.

Accepted Answer

A) True 
 B)False  False

Question 3

An order to sell 300 shares of ABC stock at the best available price is called a

Accepted Answer

A)  fill- or- kill order. 
B)  market order. 
C)  stop-loss order. 
D)  limit order. 
A)  fill- or- kill order. 
B)  market order. 
C)  stop-loss order. 
D)  limit order. B

Question 4

Many brokerage firms require that disputes between individual investors and brokers be settled through arbitration.

Accepted Answer

A) True 
 B)False

Question 5

Angela placed a stop- limit order to sell 100 shares of RST stock at $28 when the market price of RST was $31. Shortly after Angela placed her order, trading on RST was halted due to a pending news announcement. When trading re- opens RST is priced at $24 a share. Within minutes the price of RST began to drop further until it reached $19 a share. Which one of the following statements is correct concerning Angela's stop- limit order to sell?

Accepted Answer

A)  Angela's stock was sold for $28 a share. 
B)  Angela's stock was sold at a price between $19 and $24 a share. 
C)  Angela's stock was sold for $24 a share. 
D)  Angela still owns her 100 shares of stock. 
A)  Angela's stock was sold for $28 a share. 
B)  Angela's stock was sold at a price between $19 and $24 a share. 
C)  Angela's stock was sold for $24 a share. 
D)  Angela still owns her 100 shares of stock.

Question 6

Chartered Financial Analysts and Certified Financial Planners must pass a rigorous series of exams, as well as meet educational and experience requirements.

Accepted Answer

A) True 
 B)False

Question 7

Which one of the following can be considered a negative aspect of online investing?

Accepted Answer

A)  Online trading is available to the average investor. 
B)  Online investors pay lower costs per trade than investors using a broker. 
C)  Online trading is fast and efficient. 
D)  Online investors tend to trade more frequently. 
A)  Online trading is available to the average investor. 
B)  Online investors pay lower costs per trade than investors using a broker. 
C)  Online trading is fast and efficient. 
D)  Online investors tend to trade more frequently.

Question 8

Commission structures vary with the type of security being traded, the type of broker involved and the size of the order.

Accepted Answer

A) True 
 B)False

Question 9

Excessively trading a customers account to increase a stockbrokers commission income is

Accepted Answer

A)  an acceptable method of timing the market to increase rates of return. 
B)  called churning which is acceptable by the securities industry. 
C)  called churning which is unethical. 
D)  permitted provided that the customer does not object. 
A)  an acceptable method of timing the market to increase rates of return. 
B)  called churning which is acceptable by the securities industry. 
C)  called churning which is unethical. 
D)  permitted provided that the customer does not object.

Question 10

Current price information on shares of a company's stock is often accompanied by statistics on the recent price behaviour of that share.

Accepted Answer

A) True 
 B)False

Question 11

At 10:45 a.m., Ashley placed a stop- loss order to sell 200 shares of Alpha stock at $43 a share. At 2:15 p.m., the price of Alpha fell to $42.90 and then rose to $43.40 a share by the end of the trading day. Ashley order was executed that day. Ashley would have received a price

Accepted Answer

A)  between $42.90 and $43.40 a share depending upon when her trade executed. 
B)  equal to the average prices paid by the specialist during that trading day. 
C)  of $42.90 a share for her stock since her order was already recorded in the specialist's book. 
D)  of $43.40 a share for her stock since that was the closing price on the day of execution. 
A)  between $42.90 and $43.40 a share depending upon when her trade executed. 
B)  equal to the average prices paid by the specialist during that trading day. 
C)  of $42.90 a share for her stock since her order was already recorded in the specialist's book. 
D)  of $43.40 a share for her stock since that was the closing price on the day of execution.

Question 12

Small investors normally have a negotiated commission schedule while large investors benefit from a fixed- commission schedule.

Accepted Answer

A) True 
 B)False

Question 13

An index measures the current value of a group of shares in relation to a base value established previously.

Accepted Answer

A) True 
 B)False

Question 14

Descriptive information might include estimates of future demand for a company's products and future stock prices.

Accepted Answer

A) True 
 B)False

Question 15

Averages and indices differ from one another in that an index

Accepted Answer

A)  always moves up before a corresponding average moves up, and always moves down before a corresponding average moves down. 
B)  measures the current price behaviour of a group of stocks in relation to a base value set at an earlier point in time. 
C)  is the arithmetic average price behaviour of a group of shares at a given point in time. 
D)  is of value in- and- of itself, whereas an average must be compared to a historical figure to have any meaning. 
A)  always moves up before a corresponding average moves up, and always moves down before a corresponding average moves down. 
B)  measures the current price behaviour of a group of stocks in relation to a base value set at an earlier point in time. 
C)  is the arithmetic average price behaviour of a group of shares at a given point in time. 
D)  is of value in- and- of itself, whereas an average must be compared to a historical figure to have any meaning.

Question 16

A limit order is an order to buy or sell at the limit price or less.

Accepted Answer

A) True 
 B)False

Question 17

The Dow Jones Industrial Average and the Standard & Poor's Industrial Index have a number of similarities and differences. Discuss at least two major similarities and major differences between these two market indicators.

Accepted Answer

Similarity: Both the DJIA and the S&P In

Question 18

A person can become a Certified Financial Planner merely by filling out an application and paying an annual fee.

Accepted Answer

A) True 
 B)False

Question 19

Investors can usually find the financial statement of a firm on the firm's website.

Accepted Answer

A) True 
 B)False

Question 20

What is the advantage of charting the price of a security over a period of time?

Accepted Answer

Charting provides a visual view of price

The documents signed when a customer opens a brokerage account

Both the Dow Jones Industrial Average and the Standard and Poor's 500 Index are constructed to reflect the value of shares in large, mid- size and smaller companies.

An order to sell 300 shares of ABC stock at the best available price is called a

Many brokerage firms require that disputes between individual investors and brokers be settled through arbitration.

Chartered Financial Analysts and Certified Financial Planners must pass a rigorous series of exams, as well as meet educational and experience requirements.

Which one of the following can be considered a negative aspect of online investing?

Commission structures vary with the type of security being traded, the type of broker involved and the size of the order.

Excessively trading a customers account to increase a stockbrokers commission income is

Current price information on shares of a company's stock is often accompanied by statistics on the recent price behaviour of that share.

At 10:45 a.m., Ashley placed a stop- loss order to sell 200 shares of Alpha stock at $43 a share. At 2:15 p.m., the price of Alpha fell to $42.90 and then rose to $43.40 a share by the end of the trading day. Ashley order was executed that day. Ashley would have received a price

Small investors normally have a negotiated commission schedule while large investors benefit from a fixed- commission schedule.

An index measures the current value of a group of shares in relation to a base value established previously.

Descriptive information might include estimates of future demand for a company's products and future stock prices.

Averages and indices differ from one another in that an index

A limit order is an order to buy or sell at the limit price or less.

The Dow Jones Industrial Average and the Standard & Poor's Industrial Index have a number of similarities and differences. Discuss at least two major similarities and major differences between these two market indicators.

A person can become a Certified Financial Planner merely by filling out an application and paying an annual fee.

Investors can usually find the financial statement of a firm on the firm's website.

What is the advantage of charting the price of a security over a period of time?

The Investment Environment

Markets and Transactions

Return and Risk

Modern Portfolio Concepts

Shares

Analysing Shares

Share Valuation

Technical Analysis, Market Efficiency and Behavioural Finance

Fixed-Income Securities

Bond Valuation

Managed Funds: Professionally Managed Portfolios

Managing Your Own Portfolio

Options: Puts and Calls

Commodities and Financial Futures

Filters

Exam 3: Investment Information and Securities Transactions

The documents signed when a customer opens a brokerage account

Both the Dow Jones Industrial Average and the Standard and Poor's 500 Index are constructed to reflect the value of shares in large, mid- size and smaller companies.

An order to sell 300 shares of ABC stock at the best available price is called a

Many brokerage firms require that disputes between individual investors and brokers be settled through arbitration.

Chartered Financial Analysts and Certified Financial Planners must pass a rigorous series of exams, as well as meet educational and experience requirements.

Which one of the following can be considered a negative aspect of online investing?

Commission structures vary with the type of security being traded, the type of broker involved and the size of the order.

Excessively trading a customers account to increase a stockbrokers commission income is

Current price information on shares of a company's stock is often accompanied by statistics on the recent price behaviour of that share.

At 10:45 a.m., Ashley placed a stop- loss order to sell 200 shares of Alpha stock at $43 a share. At 2:15 p.m., the price of Alpha fell to $42.90 and then rose to $43.40 a share by the end of the trading day. Ashley order was executed that day. Ashley would have received a price

Small investors normally have a negotiated commission schedule while large investors benefit from a fixed- commission schedule.

An index measures the current value of a group of shares in relation to a base value established previously.

Descriptive information might include estimates of future demand for a company's products and future stock prices.

Averages and indices differ from one another in that an index

A limit order is an order to buy or sell at the limit price or less.

The Dow Jones Industrial Average and the Standard & Poor's Industrial Index have a number of similarities and differences. Discuss at least two major similarities and major differences between these two market indicators.

A person can become a Certified Financial Planner merely by filling out an application and paying an annual fee.

Investors can usually find the financial statement of a firm on the firm's website.

What is the advantage of charting the price of a security over a period of time?

The Investment Environment

Markets and Transactions

Return and Risk

Modern Portfolio Concepts

Shares

Analysing Shares

Share Valuation

Technical Analysis, Market Efficiency and Behavioural Finance

Fixed-Income Securities

Bond Valuation

Managed Funds: Professionally Managed Portfolios

Managing Your Own Portfolio

Options: Puts and Calls

Commodities and Financial Futures

Filters