Question 1

Margin accounts are mostly used by:

Accepted Answer

A) Traders who think their long-run returns will be greater than the cost of borrowing 
B) Speculators who think their long-run returns will be greater than the cost of borrowing 
C) Investors who think their long-run returns will be greater than the cost of borrowing 
D) All of the above 
A) Traders who think their long-run returns will be greater than the cost of borrowing 
B) Speculators who think their long-run returns will be greater than the cost of borrowing 
C) Investors who think their long-run returns will be greater than the cost of borrowing 
D) All of the above

Question 2

Minimum maintenance standards requires that a margined investor always maintains the initial margin position.

Accepted Answer

A) True 
 B)False

Question 3

The Value Line average is an equal-weighted index.

Accepted Answer

A) True 
 B)False

Question 4

The indexes of The New York Stock Exchange,American Exchange,and Nasdaq are all price-weighted.

Accepted Answer

A) True 
 B)False

Question 5

If a stock is held for less than 12 months,any gain in value is taxed as ordinary income.

Accepted Answer

A) True 
 B)False

Question 6

The base period for the Standard and Poor's stock indexes is 1957-58.

Accepted Answer

A) True 
 B)False

Question 7

Lipper Analytical Services measures the performance of mutual funds.

Accepted Answer

A) True 
 B)False

Question 8

If you short a stock and the price goes up,your net equity value will go up.

Accepted Answer

A) True 
 B)False

Question 9

The tax rate that specifically applies to each new dollar of income is the:

Accepted Answer

A) Marginal tax rate 
B) Average tax rate 
C) Short-term capital gains tax rate 
D) Long-term capital gains tax rate 
A) Marginal tax rate 
B) Average tax rate 
C) Short-term capital gains tax rate 
D) Long-term capital gains tax rate

Question 10

If an investor is in a 34 percent tax bracket and has held a stock for two years,the applicable tax rate that will apply to dividends is

Accepted Answer

A) 15 percent 
B) 20 percent 
C) 28 percent 
D) 34 percent 
A) 15 percent 
B) 20 percent 
C) 28 percent 
D) 34 percent

Question 11

The Standard and Poor's Indexes are price-weighted indexes.

Accepted Answer

A) True 
 B)False

Question 12

You are said to be long in a security if you purchase the security.

Accepted Answer

A) True 
 B)False

Question 13

The Russell 2000 measures performance of the 2000 largest stocks based on market value.

Accepted Answer

A) True 
 B)False

Question 14

Large,established companies make up the Dow Jones Industrial average.

Accepted Answer

A) True 
 B)False

Question 15

The Dow Jones composite index combines the Dow Jones Industrial Transportation,and Utility averages into an index of 65 stocks.

Accepted Answer

A) True 
 B)False

Question 16

You sell 100 shares of PGD short at a price of $50 per share.How much is your initial margin given margin requirements of 40%? If the stock declines to $30 per share what is your percentage gain or loss on the initial equity?

Accepted Answer

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Question 17

Margin represents the amount of money an investor may borrow to purchase securities.

Accepted Answer

A) True 
 B)False

Question 18

The Nasdaq 100 includes high tech firms such as

Accepted Answer

A) IBM,Oracle,Cisco Systems 
B) Microsoft,Intel,Cisco Systems 
C) Hewlett Packard,Cisco Systems,Compaq 
D) All of the above 
A) IBM,Oracle,Cisco Systems 
B) Microsoft,Intel,Cisco Systems 
C) Hewlett Packard,Cisco Systems,Compaq 
D) All of the above

Question 19

Long-term capital gains are taxed as ordinary income.

Accepted Answer

A) True 
 B)False

Question 20

An investor is in a 35 percent tax bracket for normal (ordinary)income.During the course of the year,he received $5,000 in dividends and had a $15,000 capital gains on stock he had held for 19 months.How much will his total tax be on this investment related income?

Accepted Answer

All the income is taxed at 15

Exam 3: Participating in the Market

Margin accounts are mostly used by:

Minimum maintenance standards requires that a margined investor always maintains the initial margin position.

The Value Line average is an equal-weighted index.

The indexes of The New York Stock Exchange,American Exchange,and Nasdaq are all price-weighted.

If a stock is held for less than 12 months,any gain in value is taxed as ordinary income.

The base period for the Standard and Poor's stock indexes is 1957-58.

Lipper Analytical Services measures the performance of mutual funds.

If you short a stock and the price goes up,your net equity value will go up.

The tax rate that specifically applies to each new dollar of income is the:

If an investor is in a 34 percent tax bracket and has held a stock for two years,the applicable tax rate that will apply to dividends is

The Standard and Poor's Indexes are price-weighted indexes.

You are said to be long in a security if you purchase the security.

The Russell 2000 measures performance of the 2000 largest stocks based on market value.

Large,established companies make up the Dow Jones Industrial average.

The Dow Jones composite index combines the Dow Jones Industrial Transportation,and Utility averages into an index of 65 stocks.

You sell 100 shares of PGD short at a price of $50 per share.How much is your initial margin given margin requirements of 40%? If the stock declines to $30 per share what is your percentage gain or loss on the initial equity?

Margin represents the amount of money an investor may borrow to purchase securities.

The Nasdaq 100 includes high tech firms such as

Long-term capital gains are taxed as ordinary income.

An investor is in a 35 percent tax bracket for normal (ordinary)income.During the course of the year,he received $5,000 in dividends and had a $15,000 capital gains on stock he had held for 19 months.How much will his total tax be on this investment related income?

The Investment Setting

Security Markets: Present and Future

Sources of Investment Information

Economic and Industry Analysis

Industry Analysis

Valuation of the Individual Firm

Financial Statement Analysis

A Basic View of Technical Analysis and Market Efficiency

Investment in Special Situations and Anomalies

Bond and Fixed Income Fundamentals

Principles of Bond Valuation and Investment

Duration and Reinvestment Concepts

Convertible Securities and Warrants

Put and Call Options

Commodities and Financial Futures

Stock Index Futures and Options

Mutual Funds

International Securities Markets

Investment in Real Assets

A Basic Look at Portfolio Management and Capital Market Theory

Measuring Risks and Returns of Portfolio Managers

Sustainable Growth Model

a Black Scholes Option Pricing Model

A Comprehensive Analysis for Real Estate Investment Decisions

Unit Investment Trusts Uits

The Makeup of Institutional Investors

Filters