Exam 10: Financial Markets: Allocating Financial Resources

Exchange-traded funds and mutual funds account for:

The price at which shares of an open-end mutual fund are issued and redeemed is based on the fund's _____.

The Securities Act of 1933 created the Federal Reserve System to serve as the central bank in the United States.

Goodwin Ross MidCap Growth is a fund that lets its investors buy ownership in a market basket that contains different securities. The fund's market basket has a composition that is similar to the composition of the Dow Jones Industrial Average stock index. In this scenario, Goodwin Ross MidCap Growth is a(n) _____.

One of the key responsibilities of an investment bank is to arrange for the actual sale of the securities.

Paula wants to buy stocks in a publicly traded company that deals in networking equipment. However, the company is not listed on any of the major stock exchanges. Paula should, therefore, purchase the stocks of the company in the _____.

Kenneth is very particular about his investment decisions and likes to perform an extensive market research before making any major investment. He, however, does not have the time and expertise to conduct market research. To deal with this situation, he should hire a(n) _____.

Danner City Bank, a commercial bank in Oklahoma, was suffering from financial losses. Once the U.S. government passed the _____ in 1999, the bank started recovering from its losses as it was allowed to sell its securities.

The Federal Reserve System was:

Which of the following is true of financial diversification?

If Carl is a preferred stockholder at Cedia Inc., and Cedia goes out of business, Carl's claim on the firm's assets:

Elyon holds a savings account in the Rochester City Bank in the United States. During an economic downturn, the bank suffers great losses. Elyon, however, is insured under the Federal Deposit Insurance Corporation and his savings are protected as the insurance covers his deposit value. Which of the following laws ensured the protection of depositors from a bank's failure?

Vincent is actively engaged in the stock market and frequently buys and sells stocks for personal profits. With a good insight about the market trends, Vincent is mostly able to sell his stocks at higher prices than the prices at which he purchases them. Vincent is a(n) _____.

Which of the following is a true statement about personal investing?

Reese buys securities in a pharmaceutical company for $3300. After a period of eight months, when the prices of the securities go up in the market, she sells her securities for $3700. In this case, the difference of $400 in the prices of the securities is called:

Urasil Mobil Corporation is a small petrochemicals firm. Since the owners of the firm do not want to pay a high listing fee, the firm's shares are not listed on an organized exchange. In this case, Urasil Mobil Corporation would trade its stocks in the _____.

Sapphinx Growth and Income, a mutual fund company, had a free hand in its operations before the year 2010. However, after an alteration in the government rules, the company faced a number of restrictions in selling its shares to investors. Which of the following acts is responsible for the alteration in the rules?

The advantage of electronic communication networks (ECNs) is that they:

Oscilance Inc., a watch manufacturing company, issues new stocks. However, instead of floating its shares in public, it directly negotiates with a small number of accredited investors that meet specific financial requirements set by the Securities Exchange Commission (SEC). Which of the following methods of issuing securities is being used by Oscilance in the given scenario?

Members of the general public can directly trade stocks in the over-the-counter market.