Question 1

Which one of the following statements about limit orders is correct?

Accepted Answer

A)  The execution of the trade will occur prior to the close of trading on the day the trade is placed. 
B)  The execution will occur at the regular open on the day following the day the trade is placed. 
C)  The trade may be executed only at the limit price or better at any time prior to expiration or cancellation of the order. 
D)  The trade will be executed at the market price at the end of the third business day, if not executed previously at the limit price. 
A)  The execution of the trade will occur prior to the close of trading on the day the trade is placed. 
B)  The execution will occur at the regular open on the day following the day the trade is placed. 
C)  The trade may be executed only at the limit price or better at any time prior to expiration or cancellation of the order. 
D)  The trade will be executed at the market price at the end of the third business day, if not executed previously at the limit price.

Question 2

Which of the following types of information is NOT available from printed publications?

Accepted Answer

A)  price quotations for stocks of major companies 
B)  stories concerning business leaders 
C)  interest rates offered by local and national banks 
D)  real time price quotes for widely held stocks and exchange traded funds 
A)  price quotations for stocks of major companies 
B)  stories concerning business leaders 
C)  interest rates offered by local and national banks 
D)  real time price quotes for widely held stocks and exchange traded funds

Question 3

An internet tool that selects stocks to meet specific criteria such as dividend payout or price earnings ratio is known as a(n)

Accepted Answer

A)  advisor. 
B)  compiler. 
C)  screener. 
D)  sorter. 
A)  advisor. 
B)  compiler. 
C)  screener. 
D)  sorter.

Question 4

So-called robo-advisors may

Accepted Answer

A)  be a service offered by one of the major investment firms. 
B)  assess an in investor's financial position and goals. 
C)  make investment recommendations. 
D)  all of the above. 
A)  be a service offered by one of the major investment firms. 
B)  assess an in investor's financial position and goals. 
C)  make investment recommendations. 
D)  all of the above.

Question 5

The Securities Investors Protection Corporation protects investors from brokers who offer incompetent advice.

Accepted Answer

A) True 
 B)False

Question 6

Which of the following sites is especially valuable for information concerning mutual funds?

Accepted Answer

A)  HYPERLINK "http://www.investopedia.com/" www.investopedia.com 
B)  HYPERLINK "http://www.morningstar.com/" www.morningstar.com 
C)  www.moody's.com 
D)  HYPERLINK "http://www.bondsonline.com/" www.bondsonline.com 
A)  HYPERLINK "http://www.investopedia.com/" www.investopedia.com 
B)  HYPERLINK "http://www.morningstar.com/" www.morningstar.com 
C)  www.moody's.com 
D)  HYPERLINK "http://www.bondsonline.com/" www.bondsonline.com

Question 7

Investment clubs are legal partnerships.

Accepted Answer

A) True 
 B)False

Question 8

Stefan places a good-'til-canceled limit order to sell 200 shares of MRK at $76 a share. When his order reaches the trading floor, MRK is trading at $76.48. Which of the following statements is true concerning Roy's order?

Accepted Answer

A)  The trade will not be executed and will be immediately cancelled. 
B)  The order will only be executed if it can be matched with an order to buy at $76. 
C)  The broker will sell the 200 shares at $76.48 and keep the additional $0.48 as a commission. 
D)  The order will be executed at $76.48 with the proceeds credited to Stefan's account. 
A)  The trade will not be executed and will be immediately cancelled. 
B)  The order will only be executed if it can be matched with an order to buy at $76. 
C)  The broker will sell the 200 shares at $76.48 and keep the additional $0.48 as a commission. 
D)  The order will be executed at $76.48 with the proceeds credited to Stefan's account.

Question 9

A stop-loss order on a short sale will be executed if the stock price rises above the specified price.

Accepted Answer

A) True 
 B)False

Question 10

Which of the following indexes would best reflect the performance of a large, diversified portfolio with equal amounts of money invested in each company.

Accepted Answer

A)  the S&P 500 Index 
B)  the Russell 3000 
C)  the NASDAQ 100 
D)  the Value Line Composite Index 
A)  the S&P 500 Index 
B)  the Russell 3000 
C)  the NASDAQ 100 
D)  the Value Line Composite Index

Question 11

Which of the following are advantages of investment clubs?
I. Small investors can pool their money to build a portfolio.
II. Members can share research responsibilities.
III. Individual members may have different goals and tolerance levels for risk.
IV. Investment clubs typically buy stocks for the long term rather than short term profits.

Accepted Answer

A)  I and III only. 
B)  III and IV only. 
C)  I, II and IV only 
D)  I, II, III and IV 
A)  I and III only. 
B)  III and IV only. 
C)  I, II and IV only 
D)  I, II, III and IV

Question 12

The Dow Jones Corporate Bond Indexes is based

Accepted Answer

A)  the yield to maturity of bonds in the index. 
B)  annual rates of return and assume the bonds were purchased one year ago and sold today. 
C)  the interest rates offered on a sample of newly issued bonds. 
D)  the closing prices of bonds in the index. 
A)  the yield to maturity of bonds in the index. 
B)  annual rates of return and assume the bonds were purchased one year ago and sold today. 
C)  the interest rates offered on a sample of newly issued bonds. 
D)  the closing prices of bonds in the index.

Question 13

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

Accepted Answer

A) True 
 B)False

Question 14

Which of the following statements concerning market, stop loss and limit orders are correct?
I. Market orders guarantee both a price and an execution.
II. Market orders guarantee an execution but not a price.
III. Limit orders guarantee a price but not an execution.
IV. Stop-loss orders may never be executed.

Accepted Answer

A)  I and III only 
B)  II, III and IV only 
C)  I and IV only 
D)  II and IV only 
A)  I and III only 
B)  II, III and IV only 
C)  I and IV only 
D)  II and IV only

Question 15

When an investor places a _____order, he agrees to buy or sell at the best available price when the trade is executed.

Accepted Answer

A)  market 
B)  limit 
C)  stop 
D)  stop-limit 
A)  market 
B)  limit 
C)  stop 
D)  stop-limit

Question 16

On March 15, Jacqueline placed a limit order, GTC, to buy 200 shares of CAKE at $40 a share. CAKE sold between $40.50 and $44.00 on that day. Over the following two months the stock price continued to rise and Jacqueline forgot about the order. After the markets closed on June 30, some bad news concerning CAKE was released. The stock opened on July 1 at a price of $32.00 a share. Which one of the following statements is correct concerning Marcos' order?

Accepted Answer

A)  The order was cancelled on May 15 because it had not been executed within the allowable two-month time period. 
B)  The order was executed on March 15 at $40.50 a share since that was the best available price of the day. 
C)  The order was executed on July 1 at a price of $40.00 a share. 
D)  The order was executed on July 1 at a price of $32.00 a share. 
A)  The order was cancelled on May 15 because it had not been executed within the allowable two-month time period. 
B)  The order was executed on March 15 at $40.50 a share since that was the best available price of the day. 
C)  The order was executed on July 1 at a price of $40.00 a share. 
D)  The order was executed on July 1 at a price of $32.00 a share.

Question 17

Commissions for on-line trades are considerable lower than for orders placed with a full- service broker.

Accepted Answer

A) True 
 B)False

Question 18

It is generally a good idea to use limit orders when trading after hours.

Accepted Answer

A) True 
 B)False

Question 19

Which one of the following is a measure of the performance of small companies?

Accepted Answer

A)  Russell 2000 
B)  Russell 1000 
C)  Russell 3000 
D)  Value Line 1700 
A)  Russell 2000 
B)  Russell 1000 
C)  Russell 3000 
D)  Value Line 1700

Question 20

The cost of using industry sponsored websites such FINRA usually exceeds the benefits for small investors.

Accepted Answer

A) True 
 B)False

Which one of the following statements about limit orders is correct?

Which of the following types of information is NOT available from printed publications?

An internet tool that selects stocks to meet specific criteria such as dividend payout or price earnings ratio is known as a(n)

So-called robo-advisors may

The Securities Investors Protection Corporation protects investors from brokers who offer incompetent advice.

Which of the following sites is especially valuable for information concerning mutual funds?

Investment clubs are legal partnerships.

Stefan places a good-'til-canceled limit order to sell 200 shares of MRK at $76 a share. When his order reaches the trading floor, MRK is trading at $76.48. Which of the following statements is true concerning Roy's order?

A stop-loss order on a short sale will be executed if the stock price rises above the specified price.

Which of the following indexes would best reflect the performance of a large, diversified portfolio with equal amounts of money invested in each company.

The Dow Jones Corporate Bond Indexes is based

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

When an investor places a _____order, he agrees to buy or sell at the best available price when the trade is executed.

Commissions for on-line trades are considerable lower than for orders placed with a full- service broker.

It is generally a good idea to use limit orders when trading after hours.

Which one of the following is a measure of the performance of small companies?

The cost of using industry sponsored websites such FINRA usually exceeds the benefits for small investors.

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 one of the following statements about limit orders is correct?

Which of the following types of information is NOT available from printed publications?

An internet tool that selects stocks to meet specific criteria such as dividend payout or price earnings ratio is known as a(n)

So-called robo-advisors may

The Securities Investors Protection Corporation protects investors from brokers who offer incompetent advice.

Which of the following sites is especially valuable for information concerning mutual funds?

Investment clubs are legal partnerships.

Stefan places a good-'til-canceled limit order to sell 200 shares of MRK at $76 a share. When his order reaches the trading floor, MRK is trading at $76.48. Which of the following statements is true concerning Roy's order?

A stop-loss order on a short sale will be executed if the stock price rises above the specified price.

Which of the following indexes would best reflect the performance of a large, diversified portfolio with equal amounts of money invested in each company.

The Dow Jones Corporate Bond Indexes is based

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

When an investor places a _____order, he agrees to buy or sell at the best available price when the trade is executed.

Commissions for on-line trades are considerable lower than for orders placed with a full- service broker.

It is generally a good idea to use limit orders when trading after hours.

Which one of the following is a measure of the performance of small companies?

The cost of using industry sponsored websites such FINRA usually exceeds the benefits for small investors.

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