Question 1

In recent years, the distinctions between discount, premium discount, and full-service brokers

Accepted Answer

A)  have been regulated into law. 
B)  have become increasingly well defined. 
C)  have been somewhat blurred. 
D)  mainly concern whether or not the brokerage offers online trading. 
A)  have been regulated into law. 
B)  have become increasingly well defined. 
C)  have been somewhat blurred. 
D)  mainly concern whether or not the brokerage offers online trading.

Question 2

Holding securities in street name

Accepted Answer

A)  makes the trading of securities easier and more efficient for individual investors. 
B)  allows the brokerage firm to sell securities without the customers approval. 
C)  enables the brokerage firm to collect the stock dividends as compensation for their services. 
D)  means that the brokerage firm actually owns the securities. 
A)  makes the trading of securities easier and more efficient for individual investors. 
B)  allows the brokerage firm to sell securities without the customers approval. 
C)  enables the brokerage firm to collect the stock dividends as compensation for their services. 
D)  means that the brokerage firm actually owns the securities.

Question 3

Which one of the following statements is correct about a good-'til-cancelled order?

Accepted Answer

A)  The order generally expires after six weeks. 
B)  The order will automatically renew unless cancelled by the customer. 
C)  The order helps customers obtain a specific price without watching the market continuously. 
D)  The order will be cancelled at the end of the trading day if not executed. 
A)  The order generally expires after six weeks. 
B)  The order will automatically renew unless cancelled by the customer. 
C)  The order helps customers obtain a specific price without watching the market continuously. 
D)  The order will be cancelled at the end of the trading day if not executed.

Question 4

Most brokers charge higher commissions for on-line trades than for telephone transactions.

Accepted Answer

A) True 
 B)False

Question 5

Stop orders are used only when selling a stock.

Accepted Answer

A) True 
 B)False

Question 6

Dr. Balcom is a busy opthamologist who has no time to trade during market hours. She likes Allergan products and thinks the stock is attractively priced at the day's close of $148.20. Over the past week, Allergan has traded between $145 and $160, fluctuating widely within each day. It is now 8:00 P.M. on a Wednesday evening. If Dr. Balcom wants to buy 200 shares of Allergan, she should

Accepted Answer

A)  place a limit order to buy 200 shares at $148.20. 
B)  place a market order to buy 200 shares. 
C)  place a limit order to buy 200 shares at $145. 
D)  wait to see what happens the next day. 
A)  place a limit order to buy 200 shares at $148.20. 
B)  place a market order to buy 200 shares. 
C)  place a limit order to buy 200 shares at $145. 
D)  wait to see what happens the next day.

Question 7

The Dow-Jones Corporate Bond Index is entirely based on industrial firms.

Accepted Answer

A) True 
 B)False

Question 8

An odd-lot trade involves a trade

Accepted Answer

A)  of only 100 shares. 
B)  that is generally priced at a discount to the market price. 
C)  of 100,000 shares or more. 
D)  consisting of any number of shares that is not a multiple of 100. 
A)  of only 100 shares. 
B)  that is generally priced at a discount to the market price. 
C)  of 100,000 shares or more. 
D)  consisting of any number of shares that is not a multiple of 100.

Question 9

What are some of the tools available to investors on the internet (name at least 4)?

Accepted Answer

Price histories, charts, scree

Question 10

Assume you wanted to find the most current price for Home Depot's stock. Your most likely source would be

Accepted Answer

A)  Yahoo Finance. 
B)  Investor's Business Daily. 
C)  The Granville Market Letter. 
D)  The Wall Street Journal. 
A)  Yahoo Finance. 
B)  Investor's Business Daily. 
C)  The Granville Market Letter. 
D)  The Wall Street Journal.

Question 11

Studies have shown that when it comes to investment advice, you usually get what you pay for.

Accepted Answer

A) True 
 B)False

Question 12

Most day traders avoid holding stocks overnight because they fear large price changes while the markets are closed.

Accepted Answer

A) True 
 B)False

Question 13

Charting is the technique of

Accepted Answer

A)  plotting the performance of a security over time. 
B)  sorting through databases of securities to select one based on certain parameters. 
C)  monitoring a stock based on the underlying economic conditions. 
D)  determining the amount of money that must be saved based on a given financial goal. 
A)  plotting the performance of a security over time. 
B)  sorting through databases of securities to select one based on certain parameters. 
C)  monitoring a stock based on the underlying economic conditions. 
D)  determining the amount of money that must be saved based on a given financial goal.

Question 14

Which one of the following is NOT published by the U.S. Government?

Accepted Answer

A)  Federal Reserve Bulletin 
B)  Survey of Current Business 
C)  Kiplinger Washington Letter 
D)  Economic Report of the President 
A)  Federal Reserve Bulletin 
B)  Survey of Current Business 
C)  Kiplinger Washington Letter 
D)  Economic Report of the President

Question 15

An investor who mistakenly buys the wrong stock because the symbols are similar has 24 hours to undo the trade.

Accepted Answer

A) True 
 B)False

Question 16

An individual investor who wishes to borrow money to buy stocks must open a

Accepted Answer

A)  signature account. 
B)  margin account. 
C)  joint account. 
D)  custodial account. 
A)  signature account. 
B)  margin account. 
C)  joint account. 
D)  custodial account.

Question 17

The Dow Jones Corporate Bond Index and the Dow Jones Industrial Average are both price- weighted averages whose divisors are adjusted periodically to maintain continuity.

Accepted Answer

A) True 
 B)False

Question 18

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

Accepted Answer

A) True 
 B)False

Question 19

Stock market averages reflect the arithmetic average price behavior of a group of stocks

Accepted Answer

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

Question 20

SIPC insurance is offered by some full-service brokers to protect investors from large losses.

Accepted Answer

A) True 
 B)False

In recent years, the distinctions between discount, premium discount, and full-service brokers

Holding securities in street name

Which one of the following statements is correct about a good-'til-cancelled order?

Most brokers charge higher commissions for on-line trades than for telephone transactions.

Stop orders are used only when selling a stock.

The Dow-Jones Corporate Bond Index is entirely based on industrial firms.

An odd-lot trade involves a trade

What are some of the tools available to investors on the internet (name at least 4)?

Assume you wanted to find the most current price for Home Depot's stock. Your most likely source would be

Studies have shown that when it comes to investment advice, you usually get what you pay for.

Most day traders avoid holding stocks overnight because they fear large price changes while the markets are closed.

Charting is the technique of

Which one of the following is NOT published by the U.S. Government?

An investor who mistakenly buys the wrong stock because the symbols are similar has 24 hours to undo the trade.

An individual investor who wishes to borrow money to buy stocks must open a

The Dow Jones Corporate Bond Index and the Dow Jones Industrial Average are both price- weighted averages whose divisors are adjusted periodically to maintain continuity.

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

Stock market averages reflect the arithmetic average price behavior of a group of stocks

SIPC insurance is offered by some full-service brokers to protect investors from large losses.

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

In recent years, the distinctions between discount, premium discount, and full-service brokers

Holding securities in street name

Which one of the following statements is correct about a good-'til-cancelled order?

Most brokers charge higher commissions for on-line trades than for telephone transactions.

Stop orders are used only when selling a stock.

The Dow-Jones Corporate Bond Index is entirely based on industrial firms.

An odd-lot trade involves a trade

What are some of the tools available to investors on the internet (name at least 4)?

Assume you wanted to find the most current price for Home Depot's stock. Your most likely source would be

Studies have shown that when it comes to investment advice, you usually get what you pay for.

Most day traders avoid holding stocks overnight because they fear large price changes while the markets are closed.

Charting is the technique of

Which one of the following is NOT published by the U.S. Government?

An investor who mistakenly buys the wrong stock because the symbols are similar has 24 hours to undo the trade.

An individual investor who wishes to borrow money to buy stocks must open a

The Dow Jones Corporate Bond Index and the Dow Jones Industrial Average are both price- weighted averages whose divisors are adjusted periodically to maintain continuity.

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

Stock market averages reflect the arithmetic average price behavior of a group of stocks

SIPC insurance is offered by some full-service brokers to protect investors from large losses.

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