Exam 19: Using Securities Markets for Financing and Investing Opportunities

Portland Power and Light recently issued bonds that offered no collateral except the reputation and established name of the Portland Power and Light Company.These represent ________ bonds.

Diversification means buying several different types of investments with the funds you have available for investment.

Lamont bought a share of stock in the ABC Corporation for $50.When he sold the stock later that year,he received $70.The par value of the stock is $5.Lamont's capital gain is $25.

Shareholder Jones sells 100 shares of Very Vegetarian Corporation stock to Investor Smith.This transaction takes place in the:

An investor who purchases stock in a company becomes a(n):

Security markets assist businesses in performing their ________ function.

Investment bankers ________ new issues of bonds or stocks by purchasing,at a discount,the entire stock or bond issue of a firm and selling the issue to interested investors at a higher price.

Although companies that issue bonds are required to pay interest,companies issuing stock are not required to pay dividends.

Investors in ________ preferred stock receive a guarantee that missed dividends will accumulate and potentially be paid later.

The ABC Corporation issues a $1,000 bond,with an interest rate of 10%,and a maturity date of 2015.This creates a liability for the ABC Corporation to pay the bondholder:

An investment banking firm assists corporations in selling the new security issue.

While common stockholders of corporations have voting rights,preferred stockholders generally do not.

Online investors expect more expert advice than investors using traditional brokerage firms.

Which of the following statements best describes the current legal interpretation of insider trading?

Last week,Danielle purchased 200 shares of High Tech Heaven,Inc on margin for $50 per share.This week,the price of High Tech Heaven's shares dropped by $10 per share due to a poor profit outlook.Danielle should anticipate:

Investors who trade securities,buy securities they are interested in holding or sell securities to make a profit or cut losses by trading in the secondary market.

Corporations and brokers prefer to have stock purchases conducted in round lots of 100 shares.

Which of the following describes a mutual fund that charges no commission to buy or sell its shares?

From an investor's point of view,corporate bonds offer less risk than government bonds.

A preferred stock's par value establishes the base used for calculating the preferred stockholders' dividend.