Question 1

Describe a bull market and a bear market.

Accepted Answer

A market situation in which most stocks are increasing in value is called a bull market.A bear market refers to a market situation in which most stocks are decreasing in value.

Question 2

________ refer to debt securities issued by the federal government that are repaid more than 10 years after issuance.

Accepted Answer

A)  Treasury bonds 
B)  TIPS 
C)  Treasury notes 
D)  Municipal bonds 
E)  Treasury bills 
A)  Treasury bonds 
B)  TIPS 
C)  Treasury notes 
D)  Municipal bonds 
E)  Treasury bills A

Question 3

Stocks of major,well-established corporations with demonstrated ability to manage their way through every kind of economic condition are known as ________ stocks.

Accepted Answer

A)  blue chip 
B)  income 
C)  growth 
D)  penny 
E)  cyclical 
A)  blue chip 
B)  income 
C)  growth 
D)  penny 
E)  cyclical A

Question 4

A stock exchange is an organization that buys and sells securities on behalf of individual and institutional investors.

Accepted Answer

A) True 
 B)False

Question 5

Explain the advantages and disadvantages of investing in mutual funds rather than in individual stocks.

Accepted Answer

Advantages:1)Diversification - the mutua

Question 6

Derivatives are contracts whose value is derived from some other entity.

Accepted Answer

A) True 
 B)False

Question 7

Which of the following markets includes exchange trading and over-the-counter trading?

Accepted Answer

A)  derivatives market 
B)  bond market 
C)  money market 
D)  stock market 
E)  currency market 
A)  derivatives market 
B)  bond market 
C)  money market 
D)  stock market 
E)  currency market

Question 8

In your portfolio,you own 450 shares of General Electric.The company announces that each share of stock is being divided into three new shares,so you now own 1,350 shares.This is known as a stock ________.

Accepted Answer

A)  option 
B)  buyback 
C)  valuation 
D)  dilution 
E)  split 
A)  option 
B)  buyback 
C)  valuation 
D)  dilution 
E)  split

Question 9

Riban Industries is a manufacturer of watches.The company's profits are predictable and the stock yields huge dividends,although the prospects for growth are low.Riban Industries is an example of a(n)________ stock.

Accepted Answer

A)  blue chip 
B)  income 
C)  cyclical 
D)  penny 
E)  defensive 
A)  blue chip 
B)  income 
C)  cyclical 
D)  penny 
E)  defensive

Question 10

Compare and contrast growth funds,income funds,and value funds.

Accepted Answer

Growth funds are funds which invest in s

Question 11

Stocks that sell for less than one dollar per share or stocks that are highly speculative are called ________ stocks.

Accepted Answer

A)  penny 
B)  income 
C)  defensive 
D)  cyclical 
E)  mid cap 
A)  penny 
B)  income 
C)  defensive 
D)  cyclical 
E)  mid cap

Question 12

Arabex is a stock market in one of the developing countries.Most of the stocks listed in the market are increasing in value.Arabex is an example of a(n)________.

Accepted Answer

A)  partial bear market 
B)  bull market 
C)  derivative market 
D)  bear market 
E)  commodity market 
A)  partial bear market 
B)  bull market 
C)  derivative market 
D)  bear market 
E)  commodity market

Question 13

________ is an over-the-counter marketplace for short-term debt instruments such as Treasury bills and commercial papers.

Accepted Answer

A)  Options market 
B)  Bond market 
C)  Money market 
D)  Stock market 
E)  Futures market 
A)  Options market 
B)  Bond market 
C)  Money market 
D)  Stock market 
E)  Futures market

Question 14

Explain why companies perform stock split.

Accepted Answer

If a board determines that a stock's pri

Question 15

Companies attempt to increase the market valuation of a share by ________.

Accepted Answer

A)  repurchasing some of the shares through a stock buyback 
B)  maintaining a lower than average price/earnings ratio 
C)  announcing a stock split of its shares 
D)  dividing the shares into multiple shares 
E)  reducing the percentage of dividend being paid out to investors 
A)  repurchasing some of the shares through a stock buyback 
B)  maintaining a lower than average price/earnings ratio 
C)  announcing a stock split of its shares 
D)  dividing the shares into multiple shares 
E)  reducing the percentage of dividend being paid out to investors

Question 16

________ funds attempt to maintain a desirable balance of risk and growth potential based on a planned retirement date.

Accepted Answer

A)  Balanced 
B)  Sector 
C)  International 
D)  Speciality 
E)  Target-date 
A)  Balanced 
B)  Sector 
C)  International 
D)  Speciality 
E)  Target-date

Question 17

Gordon Fiber is a firm that manufactures fiber products.The firm is facing a credit crunch and wants to liquidize the treasury bills and commercial papers they have.The firm can sell these at the ________ market.

Accepted Answer

A)  options 
B)  bond 
C)  money 
D)  stock 
E)  futures 
A)  options 
B)  bond 
C)  money 
D)  stock 
E)  futures

Question 18

JSE Limited is a South African organization that facilitates exchange of equities between investors.JSE Limited is a(n)________.

Accepted Answer

A)  financial broker 
B)  fund manager 
C)  treasury 
D)  stock exchange 
E)  underwriter firm 
A)  financial broker 
B)  fund manager 
C)  treasury 
D)  stock exchange 
E)  underwriter firm

Question 19

RS Bank introduces a mutual fund that is designed to invest only in the telecom sector.This mutual fund is an example of a(n)________.

Accepted Answer

A)  target-date fund 
B)  sector fund 
C)  optimal fund 
D)  balanced fund 
E)  socially responsible fund 
A)  target-date fund 
B)  sector fund 
C)  optimal fund 
D)  balanced fund 
E)  socially responsible fund

Question 20

A buyer engages in short selling when he or she ________.

Accepted Answer

A)  thinks that a stock has high long-term growth potential 
B)  wants to diversify his or her portfolio 
C)  believes that a stock's price is about to drop 
D)  wants to partially liquidate his or her portfolio 
E)  thinks that a stock has high short-term growth potential 
A)  thinks that a stock has high long-term growth potential 
B)  wants to diversify his or her portfolio 
C)  believes that a stock's price is about to drop 
D)  wants to partially liquidate his or her portfolio 
E)  thinks that a stock has high short-term growth potential

Describe a bull market and a bear market.

________ refer to debt securities issued by the federal government that are repaid more than 10 years after issuance.

Stocks of major,well-established corporations with demonstrated ability to manage their way through every kind of economic condition are known as ________ stocks.

A stock exchange is an organization that buys and sells securities on behalf of individual and institutional investors.

Explain the advantages and disadvantages of investing in mutual funds rather than in individual stocks.

Derivatives are contracts whose value is derived from some other entity.

Which of the following markets includes exchange trading and over-the-counter trading?

In your portfolio,you own 450 shares of General Electric.The company announces that each share of stock is being divided into three new shares,so you now own 1,350 shares.This is known as a stock ________.

Riban Industries is a manufacturer of watches.The company's profits are predictable and the stock yields huge dividends,although the prospects for growth are low.Riban Industries is an example of a(n)________ stock.

Compare and contrast growth funds,income funds,and value funds.

Stocks that sell for less than one dollar per share or stocks that are highly speculative are called ________ stocks.

Arabex is a stock market in one of the developing countries.Most of the stocks listed in the market are increasing in value.Arabex is an example of a(n)________.

________ is an over-the-counter marketplace for short-term debt instruments such as Treasury bills and commercial papers.

Explain why companies perform stock split.

Companies attempt to increase the market valuation of a share by ________.

________ funds attempt to maintain a desirable balance of risk and growth potential based on a planned retirement date.

Gordon Fiber is a firm that manufactures fiber products.The firm is facing a credit crunch and wants to liquidize the treasury bills and commercial papers they have.The firm can sell these at the ________ market.

JSE Limited is a South African organization that facilitates exchange of equities between investors.JSE Limited is a(n)________.

RS Bank introduces a mutual fund that is designed to invest only in the telecom sector.This mutual fund is an example of a(n)________.

A buyer engages in short selling when he or she ________.

Developing a Business Mindset

Understanding Basic Economics

The Global Marketplace

Business Ethics and Corporate Social Responsibility

Forms of Ownership

Entrepreneurship and Small Business Ownership

Management Roles, Functions, and Skills

Organization and Teamwork

Production Systems

Employee Motivation

Human Resources Management

Labor Relations

The Art and Science of Marketing

Product and Pricing Strategies

Distribution and Marketing Logistics

Customer Communication

Financial Information and Accounting Concepts

Financial Management

The Money Supply and Banking Systems

Filters

Exam 19: Financial Markets and Investment Strategies

Describe a bull market and a bear market.

________ refer to debt securities issued by the federal government that are repaid more than 10 years after issuance.

Stocks of major,well-established corporations with demonstrated ability to manage their way through every kind of economic condition are known as ________ stocks.

A stock exchange is an organization that buys and sells securities on behalf of individual and institutional investors.

Explain the advantages and disadvantages of investing in mutual funds rather than in individual stocks.

Derivatives are contracts whose value is derived from some other entity.

Which of the following markets includes exchange trading and over-the-counter trading?

In your portfolio,you own 450 shares of General Electric.The company announces that each share of stock is being divided into three new shares,so you now own 1,350 shares.This is known as a stock ________.

Riban Industries is a manufacturer of watches.The company's profits are predictable and the stock yields huge dividends,although the prospects for growth are low.Riban Industries is an example of a(n)________ stock.

Compare and contrast growth funds,income funds,and value funds.

Stocks that sell for less than one dollar per share or stocks that are highly speculative are called ________ stocks.

Arabex is a stock market in one of the developing countries.Most of the stocks listed in the market are increasing in value.Arabex is an example of a(n)________.

________ is an over-the-counter marketplace for short-term debt instruments such as Treasury bills and commercial papers.

Explain why companies perform stock split.

Companies attempt to increase the market valuation of a share by ________.

________ funds attempt to maintain a desirable balance of risk and growth potential based on a planned retirement date.

Gordon Fiber is a firm that manufactures fiber products.The firm is facing a credit crunch and wants to liquidize the treasury bills and commercial papers they have.The firm can sell these at the ________ market.

JSE Limited is a South African organization that facilitates exchange of equities between investors.JSE Limited is a(n)________.

RS Bank introduces a mutual fund that is designed to invest only in the telecom sector.This mutual fund is an example of a(n)________.

A buyer engages in short selling when he or she ________.

Developing a Business Mindset

Understanding Basic Economics

The Global Marketplace

Business Ethics and Corporate Social Responsibility

Forms of Ownership

Entrepreneurship and Small Business Ownership

Management Roles, Functions, and Skills

Organization and Teamwork

Production Systems

Employee Motivation

Human Resources Management

Labor Relations

The Art and Science of Marketing

Product and Pricing Strategies

Distribution and Marketing Logistics

Customer Communication

Financial Information and Accounting Concepts

Financial Management

The Money Supply and Banking Systems

Filters