Question 1

Which of the following is usually available on a companies website?

Accepted Answer

A)  brokerage reports 
B)  annual reports 
C)  back-office reports 
D)  red herrings 
A)  brokerage reports 
B)  annual reports 
C)  back-office reports 
D)  red herrings B

Question 2

The Value Line Index is a value weighted index based on a small sample of the 1700 stocks covered by the Value Line investment reports.

Accepted Answer

A) True 
 B)False  False

Question 3

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

Accepted Answer

A) True 
 B)False  True

Question 4

All the Standard & Poor's indexes are based on the total market values of the companies rather than on the price of a single share.

Accepted Answer

A) True 
 B)False

Question 5

A brokerage firm which provides analyst reports, investment advice and information as well as online brokerage services is called a(n)

Accepted Answer

A)  premium discount broker. 
B)  full-service broker. 
C)  basic discount broker. 
D)  electronic broker. 
A)  premium discount broker. 
B)  full-service broker. 
C)  basic discount broker. 
D)  electronic broker.

Question 6

Many day traders are also margin traders.

Accepted Answer

A) True 
 B)False

Question 7

A stop-loss order is activated once the stock reaches the specified price.

Accepted Answer

A) True 
 B)False

Question 8

Descriptive information might include the company's lines of business, a list of major competitors, and recent changes in management.

Accepted Answer

A) True 
 B)False

Question 9

Which one of the following statements about stockbrokers is correct?

Accepted Answer

A)  Stockbrokers act as dealers in the securities they trade. 
B)  Stockbrokers must be licensed by the Securities and Exchange Commission. 
C)  Stockbrokers are regulated by financial consultants. 
D)  Stockbrokers execute trades on the floor of the New York Stock Exchange on behalf of account executives. 
A)  Stockbrokers act as dealers in the securities they trade. 
B)  Stockbrokers must be licensed by the Securities and Exchange Commission. 
C)  Stockbrokers are regulated by financial consultants. 
D)  Stockbrokers execute trades on the floor of the New York Stock Exchange on behalf of account executives.

Question 10

Which one of the following web sites should you utilize to review the financial information in a company's 10-K report?

Accepted Answer

A)  SEC's Edgar website 
B)  valueline.com 
C)  wsj.com 
D)  finance.yahoo.com 
A)  SEC's Edgar website 
B)  valueline.com 
C)  wsj.com 
D)  finance.yahoo.com

Question 11

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

Accepted Answer

A) True 
 B)False

Question 12

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

Accepted Answer

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

Question 13

Subscription letters are

Accepted Answer

A)  sometimes geared to specific industries and companies. 
B)  available free on the Internet. 
C)  published on an annual basis. 
D)  descriptive in nature but do not offer investment advice. 
A)  sometimes geared to specific industries and companies. 
B)  available free on the Internet. 
C)  published on an annual basis. 
D)  descriptive in nature but do not offer investment advice.

Question 14

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

Accepted Answer

A) True 
 B)False

Question 15

A fill-or-kill order will be

Accepted Answer

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

Question 16

The value of the Value Line Composite Index

Accepted Answer

A)  divides the sum of the closing share prices by an adjusted divisor. 
B)  divides the sum of the closing share prices by a divisor and then multiplying the quotient by 100. 
C)  considers only the percentage changes in the prices of the stocks in the index. 
D)  adjusts the number of shares in each stock to produce an equal weighting. 
A)  divides the sum of the closing share prices by an adjusted divisor. 
B)  divides the sum of the closing share prices by a divisor and then multiplying the quotient by 100. 
C)  considers only the percentage changes in the prices of the stocks in the index. 
D)  adjusts the number of shares in each stock to produce an equal weighting.

Question 17

Averages and indexes differ from one another in that an index

Accepted Answer

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

Question 18

Suppose that Pfizer and Boeing are part of the Dow-Jones Industrial Average. If on a given day Boeing closes at $320 and Pfizer at $40

Accepted Answer

A)  the difference in price will not affect the Average. 
B)  the Average will include 8 shares of Pfizer for each share of Boeing. 
C)  the effect of each stock on the Average cannot be determined without knowing the number of shares outstanding for each company. 
D)  changes in the price of Boeing shares will have 8 times the effect on the Average as changes in the price of Pfizer. 
A)  the difference in price will not affect the Average. 
B)  the Average will include 8 shares of Pfizer for each share of Boeing. 
C)  the effect of each stock on the Average cannot be determined without knowing the number of shares outstanding for each company. 
D)  changes in the price of Boeing shares will have 8 times the effect on the Average as changes in the price of Pfizer.

Question 19

Brokerage firms are not allowed to make specific buy or sell recommendations to their clients.

Accepted Answer

A) True 
 B)False

Question 20

For most stocks, charts and tables of historical prices are only available through subscription services.

Accepted Answer

A) True 
 B)False

Which of the following is usually available on a companies website?

The Value Line Index is a value weighted index based on a small sample of the 1700 stocks covered by the Value Line investment reports.

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

All the Standard & Poor's indexes are based on the total market values of the companies rather than on the price of a single share.

A brokerage firm which provides analyst reports, investment advice and information as well as online brokerage services is called a(n)

Many day traders are also margin traders.

A stop-loss order is activated once the stock reaches the specified price.

Descriptive information might include the company's lines of business, a list of major competitors, and recent changes in management.

Which one of the following statements about stockbrokers is correct?

Which one of the following web sites should you utilize to review the financial information in a company's 10-K report?

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

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

Subscription letters are

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

A fill-or-kill order will be

The value of the Value Line Composite Index

Averages and indexes differ from one another in that an index

Suppose that Pfizer and Boeing are part of the Dow-Jones Industrial Average. If on a given day Boeing closes at $320 and Pfizer at $40

Brokerage firms are not allowed to make specific buy or sell recommendations to their clients.

For most stocks, charts and tables of historical prices are only available through subscription services.

The Investment Environment

Securities Markets and Transactions

Return and Risk

Modern Portfolio Concepts

Common Stocks

Analyzing Common Stocks

Stock Valuation

Market Efficiency and Behavioral Finance

Fixed-Income Securities

Bond Valuation

Mutual Funds and Exchange-Traded Funds

Managing Your Own Portfolio

Options: Puts and Calls

Futures Markets and Securities

Filters

Exam 3: Investment Information and Securities Transactions

Which of the following is usually available on a companies website?

The Value Line Index is a value weighted index based on a small sample of the 1700 stocks covered by the Value Line investment reports.

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

All the Standard & Poor's indexes are based on the total market values of the companies rather than on the price of a single share.

A brokerage firm which provides analyst reports, investment advice and information as well as online brokerage services is called a(n)

Many day traders are also margin traders.

A stop-loss order is activated once the stock reaches the specified price.

Descriptive information might include the company's lines of business, a list of major competitors, and recent changes in management.

Which one of the following statements about stockbrokers is correct?

Which one of the following web sites should you utilize to review the financial information in a company's 10-K report?

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

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

Subscription letters are

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

A fill-or-kill order will be

The value of the Value Line Composite Index

Averages and indexes differ from one another in that an index

Suppose that Pfizer and Boeing are part of the Dow-Jones Industrial Average. If on a given day Boeing closes at $320 and Pfizer at $40

Brokerage firms are not allowed to make specific buy or sell recommendations to their clients.

For most stocks, charts and tables of historical prices are only available through subscription services.

The Investment Environment

Securities Markets and Transactions

Return and Risk

Modern Portfolio Concepts

Common Stocks

Analyzing Common Stocks

Stock Valuation

Market Efficiency and Behavioral Finance

Fixed-Income Securities

Bond Valuation

Mutual Funds and Exchange-Traded Funds

Managing Your Own Portfolio

Options: Puts and Calls

Futures Markets and Securities

Filters