Question 1

Aldridge,Inc.pays an annual dividend of $1.18.What is the dividend yield on this stock?

Accepted Answer

A) 2.09 percent 
B) 3.42 percent 
C) 4.60 percent 
D) 7.20 percent 
E) 8.04 percent 
A) 2.09 percent 
B) 3.42 percent 
C) 4.60 percent 
D) 7.20 percent 
E) 8.04 percent

Question 2

What was yesterday's closing price on the Beta Movers bond?

Accepted Answer

A) $1,020.13 
B) $1,033.54 
C) $1,044.07 
D) $1,053.54 
E) $1,054.07 
A) $1,020.13 
B) $1,033.54 
C) $1,044.07 
D) $1,053.54 
E) $1,054.07

Question 3

You own twelve (12)6.25 percent coupon bonds with a total maturity value of $12,000.How much will you receive every six months as an interest payment?

Accepted Answer

A) $213.50 
B) $375.00 
C) $427.00 
D) $540.00 
E) $750.00 
A) $213.50 
B) $375.00 
C) $427.00 
D) $540.00 
E) $750.00

Question 4

If you purchase five Zeus bonds,the cost will be _____ and the annual interest income will be _____.

Accepted Answer

A) $5,000.00; $388.75 
B) $5,000.00; $412.50 
C) $5,000.00; $460.00 
D) $5,101.50; $412.50 
E) $5,101.50; $460.00 
A) $5,000.00; $388.75 
B) $5,000.00; $412.50 
C) $5,000.00; $460.00 
D) $5,101.50; $412.50 
E) $5,101.50; $460.00

Question 5

Which one of the following sentences is correct concerning fixed-income securities?

Accepted Answer

A) The coupon rate on a fixed-income security is equal to the current yield. 
B) The price of a fixed-income security is inversely related to the current yield. 
C) Fixed-income securities are default free. 
D) Fixed-income securities tend to be more liquid than money market securities. 
E) Fixed-income securities include all debt instruments issued by the U.S. government. 
A) The coupon rate on a fixed-income security is equal to the current yield. 
B) The price of a fixed-income security is inversely related to the current yield. 
C) Fixed-income securities are default free. 
D) Fixed-income securities tend to be more liquid than money market securities. 
E) Fixed-income securities include all debt instruments issued by the U.S. government.

Question 6

You purchased three call option contracts with a strike price of $22.50 and an option premium of $0.45.You held the option until the expiration date.On the expiration date,the stock was selling for $21.70 a share.What is the total profit or loss on your option position?

Accepted Answer

A) -$45 
B) $0 
C) -$240 
D) -$120 
E) -$135 
A) -$45 
B) $0 
C) -$240 
D) -$120 
E) -$135

Question 7

Which one of the following is the best definition of a money market instrument?

Accepted Answer

A) corporate debt that matures in 90 days or less 
B) bank savings account 
C) investment issued by a financial institution that matures in 30 days or less 
D) investment issued by a financial institution that matures in one year or less 
E) debt issued by the government or a corporation that matures in one year or less 
A) corporate debt that matures in 90 days or less 
B) bank savings account 
C) investment issued by a financial institution that matures in 30 days or less 
D) investment issued by a financial institution that matures in one year or less 
E) debt issued by the government or a corporation that matures in one year or less

Question 8

Why would you purchase a call option?
 What is your maximum profit or loss on such a position?

Accepted Answer

You would purchase a call option if you

Question 9

Briefly compare and contrast options and futures.

Accepted Answer

Options and futures are both types of fi

Question 10

The price you will pay (per underlying share)to buy the 50 call option on JL stock is:

Accepted Answer

A) $4.75. 
B) $4.80. 
C) $5.00. 
D) $5.90. 
E) $6.00. 
A) $4.75. 
B) $4.80. 
C) $5.00. 
D) $5.90. 
E) $6.00.

Question 11

Great Lakes Farm agreed this morning to sell General Mills 25,000 bushels of wheat six months from now at a price per bushel of $9.75.This is an example of a:

Accepted Answer

A) call option. 
B) put option. 
C) futures contract. 
D) money market security. 
E) fixed-income security. 
A) call option. 
B) put option. 
C) futures contract. 
D) money market security. 
E) fixed-income security.

Question 12

Futures contracts:

Accepted Answer

A) require payment in full at the time the contract is written. 
B) can be resold. 
C) establish the quantity to be exchanged but not the date of the exchange. 
D) establish both the quantity to be exchanged and the exchange date but not the price. 
E) are primary financial assets. 
A) require payment in full at the time the contract is written. 
B) can be resold. 
C) establish the quantity to be exchanged but not the date of the exchange. 
D) establish both the quantity to be exchanged and the exchange date but not the price. 
E) are primary financial assets.

Question 13

Preferred stock is sometimes considered to be a cross between debt and equity.Describe the characteristics of preferred stock that make it similar to debt as well as the characteristics that make it similar to equity.

Accepted Answer

Preferred stock is considered to be a cr

Question 14

What was the total price fluctuation on one November 08 soybeans contract today?

Accepted Answer

A) $1,537.50 
B) $1,540.00 
C) $1,612.50 
D) $1,660.00 
E) $1,682.50 
A) $1,537.50 
B) $1,540.00 
C) $1,612.50 
D) $1,660.00 
E) $1,682.50

Question 15

You will earn a profit as the owner of a call option if the price of the underlying asset:

Accepted Answer

A) decreases. 
B) remains constant or decreases. 
C) remains constant. 
D) remains constant or increases. 
E) increases. 
A) decreases. 
B) remains constant or decreases. 
C) remains constant. 
D) remains constant or increases. 
E) increases.

Question 16

What are the basic differences between a T-Bill and a T-Bond?
 Which security(ies)are considered risk-free?

Accepted Answer

The basic differences between a T-Bill a

Question 17

If you are willing to sell a stock and wish to receive the option premium you should:

Accepted Answer

A) buy a call. 
B) sell a call. 
C) buy a put. 
D) sell a put. 
E) either sell a call or buy a put. 
A) buy a call. 
B) sell a call. 
C) buy a put. 
D) sell a put. 
E) either sell a call or buy a put.

Question 18

You want the right,but not the obligation,to sell 600 shares of ZZ Industries stock at a price of $35 a share.How much will it cost you to establish this option position?

Accepted Answer

A) $422 
B) $408 
C) $360 
D) $378 
E) $382 
A) $422 
B) $408 
C) $360 
D) $378 
E) $382

Question 19

At the time a futures contract is written:

Accepted Answer

A) the underlying asset is specifically identified. 
B) the buyer pays a good faith deposit to the seller. 
C) the current market price of the underlying asset becomes the contract price. 
D) the current market price of the underlying asset must be less than the agreed upon futures price. 
E) the buyer is granted the right, but not the obligation, to exercise the contract. 
A) the underlying asset is specifically identified. 
B) the buyer pays a good faith deposit to the seller. 
C) the current market price of the underlying asset becomes the contract price. 
D) the current market price of the underlying asset must be less than the agreed upon futures price. 
E) the buyer is granted the right, but not the obligation, to exercise the contract.

Question 20

Options expire on the _____ of the expiration month.

Accepted Answer

A) last trading day 
B) 3rd Friday 
C) last Friday 
D) Saturday following the 3rd Friday 
E) Saturday following the last Friday 
A) last trading day 
B) 3rd Friday 
C) last Friday 
D) Saturday following the 3rd Friday 
E) Saturday following the last Friday

Aldridge,Inc.pays an annual dividend of $1.18.What is the dividend yield on this stock?

What was yesterday's closing price on the Beta Movers bond?

You own twelve (12)6.25 percent coupon bonds with a total maturity value of $12,000.How much will you receive every six months as an interest payment?

If you purchase five Zeus bonds,the cost will be _ and the annual interest income will be _.

Which one of the following sentences is correct concerning fixed-income securities?

You purchased three call option contracts with a strike price of $22.50 and an option premium of $0.45.You held the option until the expiration date.On the expiration date,the stock was selling for $21.70 a share.What is the total profit or loss on your option position?

Which one of the following is the best definition of a money market instrument?

Why would you purchase a call option? What is your maximum profit or loss on such a position?

Briefly compare and contrast options and futures.

The price you will pay (per underlying share)to buy the 50 call option on JL stock is:

Great Lakes Farm agreed this morning to sell General Mills 25,000 bushels of wheat six months from now at a price per bushel of $9.75.This is an example of a:

Futures contracts:

Preferred stock is sometimes considered to be a cross between debt and equity.Describe the characteristics of preferred stock that make it similar to debt as well as the characteristics that make it similar to equity.

What was the total price fluctuation on one November 08 soybeans contract today?

You will earn a profit as the owner of a call option if the price of the underlying asset:

What are the basic differences between a T-Bill and a T-Bond? Which security(ies)are considered risk-free?

If you are willing to sell a stock and wish to receive the option premium you should:

You want the right,but not the obligation,to sell 600 shares of ZZ Industries stock at a price of $35 a share.How much will it cost you to establish this option position?

At the time a futures contract is written:

Options expire on the _____ of the expiration month.

A Brief History of Risk and Return

The Investment Process

Mutual Funds and Other Investment Companies

The Stock Market

Common Stock Valuation

Stock Price Behavior and Market Efficiency

Behavioral Finance and the Psychology of Investing

Interest Rates

Bond Prices and Yields

Diversification and Risky Asset Allocation

Return, Risk, and the Security Market Line

Performance Evaluation and Risk Management

Futures Contracts

Stock Options

Option Valuation

Projecting Cash Flow and Earnings

Corporate and Government Bonds

Global Economic Activity and Industry Analysis

Mortgage-Backed Securities

Filters

Exam 3: Overview of Security Types

Aldridge,Inc.pays an annual dividend of $1.18.What is the dividend yield on this stock?

What was yesterday's closing price on the Beta Movers bond?

You own twelve (12)6.25 percent coupon bonds with a total maturity value of $12,000.How much will you receive every six months as an interest payment?

If you purchase five Zeus bonds,the cost will be _____ and the annual interest income will be _____.

Which one of the following sentences is correct concerning fixed-income securities?

You purchased three call option contracts with a strike price of $22.50 and an option premium of $0.45.You held the option until the expiration date.On the expiration date,the stock was selling for $21.70 a share.What is the total profit or loss on your option position?

Which one of the following is the best definition of a money market instrument?

Why would you purchase a call option? What is your maximum profit or loss on such a position?

Briefly compare and contrast options and futures.

The price you will pay (per underlying share)to buy the 50 call option on JL stock is:

Great Lakes Farm agreed this morning to sell General Mills 25,000 bushels of wheat six months from now at a price per bushel of $9.75.This is an example of a:

Futures contracts:

Preferred stock is sometimes considered to be a cross between debt and equity.Describe the characteristics of preferred stock that make it similar to debt as well as the characteristics that make it similar to equity.

What was the total price fluctuation on one November 08 soybeans contract today?

You will earn a profit as the owner of a call option if the price of the underlying asset:

What are the basic differences between a T-Bill and a T-Bond? Which security(ies)are considered risk-free?

If you are willing to sell a stock and wish to receive the option premium you should:

You want the right,but not the obligation,to sell 600 shares of ZZ Industries stock at a price of $35 a share.How much will it cost you to establish this option position?

At the time a futures contract is written:

Options expire on the _____ of the expiration month.

A Brief History of Risk and Return

The Investment Process

Mutual Funds and Other Investment Companies

The Stock Market

Common Stock Valuation

Stock Price Behavior and Market Efficiency

Behavioral Finance and the Psychology of Investing

Interest Rates

Bond Prices and Yields

Diversification and Risky Asset Allocation

Return, Risk, and the Security Market Line

Performance Evaluation and Risk Management

Futures Contracts

Stock Options

Option Valuation

Projecting Cash Flow and Earnings

Corporate and Government Bonds

Global Economic Activity and Industry Analysis

Mortgage-Backed Securities

Filters

If you purchase five Zeus bonds,the cost will be _ and the annual interest income will be _.