Question 1

Placing your trades with a discount broker can save you as much as 80% of the commission charged by a full- service broker.

Accepted Answer

A) True 
 B)False

Question 2

The Dow Jones Industrial Average (DJIA) consists of 30 shares whose price behaviour

Accepted Answer

A)  broadly reflects the overall price behaviour of the stock market. 
B)  reflects the changes in value of manufacturing shares only. 
C)  leads the movements in the general economy by one to two weeks. 
D)  typically has little correlation with the rest of the stock market. 
A)  broadly reflects the overall price behaviour of the stock market. 
B)  reflects the changes in value of manufacturing shares only. 
C)  leads the movements in the general economy by one to two weeks. 
D)  typically has little correlation with the rest of the stock market.

Question 3

Trading shares is much faster and less complicated if an individual investor has possession of the actual stock certificates.

Accepted Answer

A) True 
 B)False

Question 4

Most brokers charge higher commissions for online trades than for telephone transactions.

Accepted Answer

A) True 
 B)False

Question 5

When placing an order online, an individual investor should always double check the share symbol prior to submitting the order.

Accepted Answer

A) True 
 B)False

Question 6

A margin account

Accepted Answer

A)  can be opened by any investor who wants to purchase securities by charging them to his/her credit card. 
B)  is permitted only in wrap accounts. 
C)  allows an investor to borrow a portion of the purchase price at a reasonable rate of interest. 
D)  allows an investor to borrow one hundred percent of the cost of the securities purchased. 
A)  can be opened by any investor who wants to purchase securities by charging them to his/her credit card. 
B)  is permitted only in wrap accounts. 
C)  allows an investor to borrow a portion of the purchase price at a reasonable rate of interest. 
D)  allows an investor to borrow one hundred percent of the cost of the securities purchased.

Question 7

Most brokerage firms will invest surplus cash, dividends and interest received, proceeds from the sale of stock and the like in

Accepted Answer

A)  a non- interest bearing account. 
B)  certificates of deposit. 
C)  a money market fund. 
D)  additional securities of the same type. 
A)  a non- interest bearing account. 
B)  certificates of deposit. 
C)  a money market fund. 
D)  additional securities of the same type.

Question 8

ABC's share is now selling for $57 per share. Kim wants to buy 100 shares but only if she can do so at $55 or less. She should place a(n)

Accepted Answer

A)  stop order. 
B)  limit order. 
C)  odd- lot order. 
D)  market order. 
A)  stop order. 
B)  limit order. 
C)  odd- lot order. 
D)  market order.

Question 9

Traders who hold shares for less than a full day can reduce the tax burden on their profits.

Accepted Answer

A) True 
 B)False

Question 10

An informal, voluntary agreement to solve disputes between an investor and his/her broker by utilising a person to facilitate negotiations between the two parties is called

Accepted Answer

A)  litigation. 
B)  mediation. 
C)  binding arbitration. 
D)  voluntary arbitration. 
A)  litigation. 
B)  mediation. 
C)  binding arbitration. 
D)  voluntary arbitration.

Question 11

Share market averages reflect the arithmetic average price behaviour of a group of shares

Accepted Answer

A)  relative to other indices. 
B)  relative to a base value set at an earlier point in time. 
C)  at a given point in time. 
D)  relative to a base price of 100. 
A)  relative to other indices. 
B)  relative to a base value set at an earlier point in time. 
C)  at a given point in time. 
D)  relative to a base price of 100.

Question 12

Mike bought 200 shares of EG stock two years ago at $16 per share. The shares have traded in a range of $21 to $44 a share over the past year. EG is now selling for $43.60 a share. EG announces its earnings today and Mike feels the shares could go to $60 on good news or fall to $30 on bad. To protect his profits, the most appropriate order for him to place is

Accepted Answer

A)  a stop- loss order at $42. 
B)  market order to sell immediately. 
C)  a stop- limit order to sell at $45. 
D)  a limit sell order at $60.00. 
A)  a stop- loss order at $42. 
B)  market order to sell immediately. 
C)  a stop- limit order to sell at $45. 
D)  a limit sell order at $60.00.

Question 13

A fill- or- kill order will be

Accepted Answer

A)  in effect until cancelled by the customer who placed the order. 
B)  executed immediately upon order arrival on the floor of the exchange. 
C)  cancelled at the end of the trading day if not executed by that time. 
D)  cancelled if not immediately executed at the stated price or better. 
A)  in effect until cancelled by the customer who placed the order. 
B)  executed immediately upon order arrival on the floor of the exchange. 
C)  cancelled at the end of the trading day if not executed by that time. 
D)  cancelled if not immediately executed at the stated price or better.

Question 14

The Standard & Poor's indices are all based on market values which consider the number of shares outstanding.

Accepted Answer

A) True 
 B)False

Question 15

Which one of the following statements is true concerning bonds?

Accepted Answer

A)  Bond yield data is more useful to an investor when compared over time. 
B)  Bonds with similar characteristics generally have widely disparate bond yields. 
C)  A bond yield represents only the interest earned on a bond. 
D)  A bond's yield remains constant even when a bond is sold prior to maturity. 
A)  Bond yield data is more useful to an investor when compared over time. 
B)  Bonds with similar characteristics generally have widely disparate bond yields. 
C)  A bond yield represents only the interest earned on a bond. 
D)  A bond's yield remains constant even when a bond is sold prior to maturity.

Question 16

You can utilise the Internet to develop financial plans and goals, analyse and select individual investments and organise your portfolio.

Accepted Answer

A) True 
 B)False

Question 17

Analytical information would include such information as estimates of growth in sales and future earnings.

Accepted Answer

A) True 
 B)False

Question 18

What does it mean to say a bond has a yield-to-maturity of 6%?

Accepted Answer

A bond yield is the annual rate of retur

Question 19

Investment clubs are legal partnerships.

Accepted Answer

A) True 
 B)False

Question 20

Share market averages and indices are commonly used to measure the

Accepted Answer

A)  specific behaviour of alternative investments. 
B)  specific behaviour of companies. 
C)  general behaviour of share prices. 
D)  specific behaviour of the economy. 
A)  specific behaviour of alternative investments. 
B)  specific behaviour of companies. 
C)  general behaviour of share prices. 
D)  specific behaviour of the economy.

Placing your trades with a discount broker can save you as much as 80% of the commission charged by a full- service broker.

The Dow Jones Industrial Average (DJIA) consists of 30 shares whose price behaviour

Trading shares is much faster and less complicated if an individual investor has possession of the actual stock certificates.

Most brokers charge higher commissions for online trades than for telephone transactions.

When placing an order online, an individual investor should always double check the share symbol prior to submitting the order.

A margin account

Most brokerage firms will invest surplus cash, dividends and interest received, proceeds from the sale of stock and the like in

ABC's share is now selling for $57 per share. Kim wants to buy 100 shares but only if she can do so at $55 or less. She should place a(n)

Traders who hold shares for less than a full day can reduce the tax burden on their profits.

An informal, voluntary agreement to solve disputes between an investor and his/her broker by utilising a person to facilitate negotiations between the two parties is called

Share market averages reflect the arithmetic average price behaviour of a group of shares

A fill- or- kill order will be

The Standard & Poor's indices are all based on market values which consider the number of shares outstanding.

Which one of the following statements is true concerning bonds?

You can utilise the Internet to develop financial plans and goals, analyse and select individual investments and organise your portfolio.

Analytical information would include such information as estimates of growth in sales and future earnings.

What does it mean to say a bond has a yield-to-maturity of 6%?

Investment clubs are legal partnerships.

Share market averages and indices are commonly used to measure the

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

Placing your trades with a discount broker can save you as much as 80% of the commission charged by a full- service broker.

The Dow Jones Industrial Average (DJIA) consists of 30 shares whose price behaviour

Trading shares is much faster and less complicated if an individual investor has possession of the actual stock certificates.

Most brokers charge higher commissions for online trades than for telephone transactions.

When placing an order online, an individual investor should always double check the share symbol prior to submitting the order.

A margin account

Most brokerage firms will invest surplus cash, dividends and interest received, proceeds from the sale of stock and the like in

ABC's share is now selling for $57 per share. Kim wants to buy 100 shares but only if she can do so at $55 or less. She should place a(n)

Traders who hold shares for less than a full day can reduce the tax burden on their profits.

An informal, voluntary agreement to solve disputes between an investor and his/her broker by utilising a person to facilitate negotiations between the two parties is called

Share market averages reflect the arithmetic average price behaviour of a group of shares

A fill- or- kill order will be

The Standard & Poor's indices are all based on market values which consider the number of shares outstanding.

Which one of the following statements is true concerning bonds?

You can utilise the Internet to develop financial plans and goals, analyse and select individual investments and organise your portfolio.

Analytical information would include such information as estimates of growth in sales and future earnings.

What does it mean to say a bond has a yield-to-maturity of 6%?

Investment clubs are legal partnerships.

Share market averages and indices are commonly used to measure the

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