Exam 16: Investment Concepts

All of the following are basic categories of financial assets except

The total value of a firm's stock which can be computed by multiplying the number of shares outstanding by the market price per share is called what?

An order that gives instructions to cancel the order if the price conditions are not met when the order reaches the market is called a ____ order.

Because the computations for different market indexes are essentially the same, it really doesn't matter which index is used to determine how the performance of your investment portfolio compares to the market.

The ____ index measures the aggregate return for the 30 largest industrial firms in the United States.

Because stocks must be traded in round lots, or multiples of 100 shares, on the organized exchanges, individual investors can only trade in multiples of 100 shares at a time.

Which of the following is not a common reason given for investing?

The total return earned from the time an investment is purchased until it is liquidated is called a(n) ____.

Use the following information to compute the geometric arithmetic average return for Topwater Boats for 2007 through 2012.

Financial instruments that offer steady interest or dividend payments are called income securities because they are good income-producing investments.

The costs associated with trading securities, which include the costs of time, effort, and phone calls, as well as brokered commissions are called

Margin trading allows investors to magnify the returns earned on their investments.This means that if a stock that is purchased on margin experiences a price increase of 15 percent, the investor actually receives a return greater than 15 percent, even if no dividends are paid, and vice versa.

Income securities are used primarily to

Tristar Growth Mutual Fund reported annual holding period returns of 22 percent in 2010, 25 percent in 2011, and 31 percent in 2012.What was the simple arithmetic average return generated by Tristar for the period 2010 through 2012?

An investor earned a holding period return equal to 10 percent on a stock that she purchased for $27.50.During the time she held the stock, the company paid a $2 dividend.For what price did the investor sell the stock?

The current yield for a bond is computed by dividing the current interest payment associated with the bond by the current market price of the bond.

A ____ order is an order to buy or sell a stock at no worse than a specified price.

Asset allocation recommendations shift from investments like ____ to ____ as the individual investor gets closer to retirement.

Geometric Average Return Foxy Ladies Investment Club The Foxy Ladies Investment Club purchased 100 shares of common stock each in Coca-Cola, Intel, and Merck on January 02, 2010.A summary of their portfolio is given below: -Refer to Foxy Ladies Investment Club.What was the 12-month holding period return for Coca-Cola during 2010?

When an investor places a stop order, he or she is telling the broker to "stop" an order that was placed previously but hasn't been executed yet.