Exam 3: Investment Information and Securities Transactions

Investment clubs are prohibited from opening accounts for on-line trading.

The Internet provides I. educational sites for financial investing. II. the ability to trade securities on-line. III. current information on stocks and bonds. IV. analysts reports on individual stocks.

Which of the following is required by the Investment Advisers Act to disclose their background and any conflicts of interest?

Stocks held in street name can be quickly sold online or by telephone.

The Securities Investors Protection Corporation protects investors from brokers who offer incompetent advice.

Bond yields are

Whose responsibility is it to determine if a client can pay for the securities they purchase?

It is generally a good idea to use limit orders when trading after hours.

Which of the following statements about the Dow Jones Industrial Average are correct? I. Higher-priced stocks tend to affect the average more than lower-priced stocks. II. A one-point change in the DJIA correlates to a $1 change in average share value. III. Changes in the DJIA are made to reflect company mergers and acquisitions. IV. The DJIA divisor was determined when the average was created and remains constant.

Most brokerage firms will invest surplus cash, dividends and interest received, proceeds from the sale of stock and the like in

Which one of the following statements about limit orders is correct?

An investor who mistakenly buys the wrong stock because the symbols are similar has 24 hours to undo the trade.

Which of the following statements concerning market and limit orders are correct? I. Market orders guarantee both a price and an execution. II. Market orders guarantee an execution but not a price. III. Limit orders guarantee a price but not an execution. IV. Stop-loss orders may never be executed.

Current price information is found in which of the following? I. Dow Theory Letters II. Yahoo!Finance III. CNBC TV website IV. Hulbert Financial Digest

Which of the following is published yearly by publicly-held corporations and provided free to their stockholders and other investors?

Stock market averages reflect the arithmetic average price behavior of a group of stocks

When placing an order on-line, an individual investor should always double check the ticker symbol prior to submitting the order.

Many brokerage firms require that disputes between individual investors and brokers be settled through arbitration.

A "pump and dump" scheme involves buying shares of stock, hyping that stock via the Internet and then quickly selling the shares at a profit.

Placing your trades with a discount broker can save you as much as 80% of the commission charged by a full-service broker.