Exam 9: Financial Markets: Allocating Financial Resources

Investors who use a buy-and-hold approach carefully analyze stocks in order to identify those that offer the greatest growth potential. They buy these specific stocks in large quantities with the intention of holding them for at least six months, and possibly as long as a year.

Individual investors are not permitted to trade stocks on the NYSE or NASDAQ. Therefore, individuals must seek the help of which of the following?

Preferred shareholders are guaranteed to receive a dividend every quarter.

Exchange traded funds (ETF) are certificates traded on securities markets that represent the legal right of ownership over part of a basket of individual stock certificates or other securities.

Bonds are shares of ownership in a corporation.

Samir has been following the information for the Admiral Engines stock on a financial website. He has noticed that the firm's PE has been steadily rising. What might Samir conclude from this result?

You have just graduated from college and landed your first job. However, you realize that it is never too early to begin investing for your future needs. Which of the following investment strategies would be most likely to help you accumulate significant wealth over the long haul?

Unlike the NYSE, which of the following has the NASDAQ never done?

Which of the following acts as agents for investors who want to buy or sell financial securities?

The Dow Jones Industrial Average, also known as the Dow, is a security exchange where stocks are traded.

Julie owns a bond with a $1000 par value. If she decides to sell her bond on the secondary market before the maturity date, what might be the result?

What is one of the drawbacks of mutual funds?

A limit order is an order to a broker to buy a specific stock within a specific timeline. This allows the investor to confirm purchases are made by the end of the specified trading day.

Which of the following is an advantage of many mutual funds?

What do we call the distribution of profits to corporate owners?

Standard & Poor's 500 is a stock index based on stock prices of 500 major U.S. corporations in a variety of industries and market sectors.

Discuss the appeal to investors of mutual funds and exchange traded funds.

Diversification is a common strategy for dealing with risk.

Suri owns 100 shares in OPQ, an oil company. After looking at the firm's latest annual report, she feels good about the performance of the company, so she tells her broker to buy 100 more shares but to pay no more than $33 a share. What did Suri just issue her broker?

The par value of a bond is the value of that bond at its maturity. It represents what the firm must pay the bondholder when the bond matures.