Question 1

Which of the following types of information will NOT be found in major urban newspapers?

Accepted Answer

A)  price quotations for stocks of local interest 
B)  stories concerning local business leaders 
C)  interest rates offered by local and national banks 
D)  real time price quotes for widely held stocks and exchange traded funds 
A)  price quotations for stocks of local interest 
B)  stories concerning local business leaders 
C)  interest rates offered by local and national banks 
D)  real time price quotes for widely held stocks and exchange traded funds

Question 2

For most stocks, charts and tables of historical prices are only available through subscription services.

Accepted Answer

A) True 
 B)False

Question 3

Regulation FD requires that brokerage firms share buy and sell recommendations with all clients simultaneously.

Accepted Answer

A) True 
 B)False

Question 4

Regulation FD requires simultaneous disclosure of critical information simultaneously to investment professionals and the general public with the exception of

Accepted Answer

A)  brokerage firms. 
B)  hedge funds. 
C)  securities rating service such as Moody's Investor Services and Standard & Poor's. 
D)  mutual fund managers. 
A)  brokerage firms. 
B)  hedge funds. 
C)  securities rating service such as Moody's Investor Services and Standard & Poor's. 
D)  mutual fund managers.

Question 5

Individuals can now use the Internet to buy and sell
I. stocks.
II. bonds.
III. mutual funds.
IV. stock options.

Accepted Answer

A)  I and IV only 
B)  II and III only 
C)  I, II and III only 
D)  I, II, III and IV 
A)  I and IV only 
B)  II and III only 
C)  I, II and III only 
D)  I, II, III and IV

Question 6

EAFE stands for

Accepted Answer

A)  Europe, Asia, Far East. 
B)  Europe, Australia, Far East. 
C)  England, America, Far East. 
D)  England, America, France, European Community. 
A)  Europe, Asia, Far East. 
B)  Europe, Australia, Far East. 
C)  England, America, Far East. 
D)  England, America, France, European Community.

Question 7

Ryan bought a stock three years ago for $6 a share. Today, June 22, the stock is selling for $72 a share. Ryan is afraid that the price will fall and does not want to lose his profits so he places a stop-loss order to sell at $70. The stock sells between $71 and $75 throughout the remainder of the day on June 22. On the morning of June 23, the stock opens at $9 a share based on rumors of a possible bankruptcy due to inappropriate accounting procedures. Which one of the following statements is true concerning this situation?

Accepted Answer

A)  Ryan was able to sell his stock for $70 a share thereby protecting his profits. 
B)  Ryan's stock was sold for $9 a share causing him to lose most of his profits. 
C)  Ryan still owns his shares of stock since his order was never executed at the $70 price. 
D)  Ryan received a call from the specialist asking him what he wanted to do about his order. 
A)  Ryan was able to sell his stock for $70 a share thereby protecting his profits. 
B)  Ryan's stock was sold for $9 a share causing him to lose most of his profits. 
C)  Ryan still owns his shares of stock since his order was never executed at the $70 price. 
D)  Ryan received a call from the specialist asking him what he wanted to do about his order.

Question 8

Reviewing industry and company information may provide guidance on the future outlook of a particular firm.

Accepted Answer

A) True 
 B)False

Question 9

In which of the following cases might an investor receive help from The Securities Investor Protection Corporation?

Accepted Answer

A)  The investor purchased a stock at $40 per share because his broker recommended it. Over the next six months, it fell to $20 per share. 
B)  The investor purchases stock in a company that shortly later was forced into bankruptcy because of accounting fraud. 
C)  The investor holds $100,000 worth of stock in certificate form. The certificates are destroyed in a fire. 
D)  A broker took money sent by investors to cover stock purchases, but never invested it and sent falsified statements to cover the fraud. 
A)  The investor purchased a stock at $40 per share because his broker recommended it. Over the next six months, it fell to $20 per share. 
B)  The investor purchases stock in a company that shortly later was forced into bankruptcy because of accounting fraud. 
C)  The investor holds $100,000 worth of stock in certificate form. The certificates are destroyed in a fire. 
D)  A broker took money sent by investors to cover stock purchases, but never invested it and sent falsified statements to cover the fraud.

Question 10

Excessively trading a customers account to increase a stockbrokers commission income is

Accepted Answer

A)  an acceptable method of timing the market to increase rates of return. 
B)  called churning which is an illegal practice. 
C)  probably unethical but yet is acceptable by the securities industry. 
D)  permitted provided that the customer does not object. 
A)  an acceptable method of timing the market to increase rates of return. 
B)  called churning which is an illegal practice. 
C)  probably unethical but yet is acceptable by the securities industry. 
D)  permitted provided that the customer does not object.

Question 11

Which one of the following statements about stockbrokers is correct?

Accepted Answer

A)  Stockbrokers act as dealers in the securities they trade. 
B)  Stockbrokers must be licensed by the Securities and Exchange Commission. 
C)  Stockbrokers are regulated by financial consultants. 
D)  Stockbrokers execute trades on the floor of the New York Stock Exchange on behalf of account executives. 
A)  Stockbrokers act as dealers in the securities they trade. 
B)  Stockbrokers must be licensed by the Securities and Exchange Commission. 
C)  Stockbrokers are regulated by financial consultants. 
D)  Stockbrokers execute trades on the floor of the New York Stock Exchange on behalf of account executives.

Question 12

The Dow Jones Industrial Average (DJIA) consists of 30 stocks whose price behavior

Accepted Answer

A)  typically has little correlation with the rest of the stock market. 
B)  broadly reflects the overall price behavior of the stock market. 
C)  reflects the changes in value of manufacturing stocks only. 
D)  leads the movements in the general economy by one to two weeks. 
A)  typically has little correlation with the rest of the stock market. 
B)  broadly reflects the overall price behavior of the stock market. 
C)  reflects the changes in value of manufacturing stocks only. 
D)  leads the movements in the general economy by one to two weeks.

Question 13

Individuals can use the Internet to
I. analyze individual securities.
II. search for stocks that meet specific investment criteria.
III. organize their financial information.
IV. track the performance of their portfolio.

Accepted Answer

A)  I and IV only 
B)  II and III only 
C)  I, III and IV only 
D)  I, II, III and IV 
A)  I and IV only 
B)  II and III only 
C)  I, III and IV only 
D)  I, II, III and IV

Question 14

Mike bought 200 shares of EG stock two years ago at $16 per share. The stock has traded in a range of $21 to $44 a share over the past year. EG is now selling for $43.60 a share. EG announces its earnings today and Mike feels the stock could go to $60 on good news or fall to $30 on bad. To protect his profits, the most appropriate order for him to place is

Accepted Answer

A)  market order to sell immediately. 
B)  a limit sell order at $60.00. 
C)  a stop loss order at $42. 
D)  a stop-limit order to sell at $45. 
A)  market order to sell immediately. 
B)  a limit sell order at $60.00. 
C)  a stop loss order at $42. 
D)  a stop-limit order to sell at $45.

Question 15

Investors who are aware of current economic, political, and market events tend to make better investment decisions.

Accepted Answer

A) True 
 B)False

Question 16

A report describing the transactions in an account, listing the dividend and interest payments received, and detailing the current holdings is called a

Accepted Answer

A)  prospectus. 
B)  red herring. 
C)  statement. 
D)  street certificate. 
A)  prospectus. 
B)  red herring. 
C)  statement. 
D)  street certificate.

Question 17

The published analysis and recommendations of an individual brokerage firm is called a

Accepted Answer

A)  prospectus. 
B)  comparative data source. 
C)  back-office research report. 
D)  broker's subscription report. 
A)  prospectus. 
B)  comparative data source. 
C)  back-office research report. 
D)  broker's subscription report.

Question 18

Trading stocks is much faster and less complicated if an individual investor has possession of the actual stock certificates.

Accepted Answer

A) True 
 B)False

Question 19

Which of the following are characteristics of a wrap account?
I. a flat amount of commission per transaction
II. an increased probability of account churning
III. a money manager
IV. detailed performance reports

Accepted Answer

A)  I and II only 
B)  III and IV only 
C)  II, III and IV only 
D)  I, III and IV only 
A)  I and II only 
B)  III and IV only 
C)  II, III and IV only 
D)  I, III and IV only

Question 20

Which of the following designations does NOT have formal education and testing requirements?

Accepted Answer

A)  Chartered Financial Analyst 
B)  Certified Financial Planner 
C)  Registered Investment Adviser 
D)  Certified Public Accountant 
A)  Chartered Financial Analyst 
B)  Certified Financial Planner 
C)  Registered Investment Adviser 
D)  Certified Public Accountant

Which of the following types of information will NOT be found in major urban newspapers?

For most stocks, charts and tables of historical prices are only available through subscription services.

Regulation FD requires that brokerage firms share buy and sell recommendations with all clients simultaneously.

Regulation FD requires simultaneous disclosure of critical information simultaneously to investment professionals and the general public with the exception of

Individuals can now use the Internet to buy and sell I. stocks. II. bonds. III. mutual funds. IV. stock options.

EAFE stands for

Reviewing industry and company information may provide guidance on the future outlook of a particular firm.

In which of the following cases might an investor receive help from The Securities Investor Protection Corporation?

Excessively trading a customers account to increase a stockbrokers commission income is

Which one of the following statements about stockbrokers is correct?

The Dow Jones Industrial Average (DJIA) consists of 30 stocks whose price behavior

Individuals can use the Internet to I. analyze individual securities. II. search for stocks that meet specific investment criteria. III. organize their financial information. IV. track the performance of their portfolio.

Investors who are aware of current economic, political, and market events tend to make better investment decisions.

A report describing the transactions in an account, listing the dividend and interest payments received, and detailing the current holdings is called a

The published analysis and recommendations of an individual brokerage firm is called a

Trading stocks is much faster and less complicated if an individual investor has possession of the actual stock certificates.

Which of the following are characteristics of a wrap account? I. a flat amount of commission per transaction II. an increased probability of account churning III. a money manager IV. detailed performance reports

Which of the following designations does NOT have formal education and testing requirements?

The Investment Environment

Securities Markets and Transactions

Return and Risk

Modern Portfolio Concepts

Common Stocks

Analyzing Common Stocks

Stock Valuation

Market Efficiency and Behavioral Finance

Fixed-Income Securities

Bond Valuation

Mutual Funds and Exchange-Traded Funds

Managing Your Own Portfolio

Options: Puts and Calls

Futures Markets and Securities

Filters

Exam 3: Investment Information and Securities Transactions

Which of the following types of information will NOT be found in major urban newspapers?

For most stocks, charts and tables of historical prices are only available through subscription services.

Regulation FD requires that brokerage firms share buy and sell recommendations with all clients simultaneously.

Regulation FD requires simultaneous disclosure of critical information simultaneously to investment professionals and the general public with the exception of

Individuals can now use the Internet to buy and sell I. stocks. II. bonds. III. mutual funds. IV. stock options.

EAFE stands for

Reviewing industry and company information may provide guidance on the future outlook of a particular firm.

In which of the following cases might an investor receive help from The Securities Investor Protection Corporation?

Excessively trading a customers account to increase a stockbrokers commission income is

Which one of the following statements about stockbrokers is correct?

The Dow Jones Industrial Average (DJIA) consists of 30 stocks whose price behavior

Individuals can use the Internet to I. analyze individual securities. II. search for stocks that meet specific investment criteria. III. organize their financial information. IV. track the performance of their portfolio.

Investors who are aware of current economic, political, and market events tend to make better investment decisions.

A report describing the transactions in an account, listing the dividend and interest payments received, and detailing the current holdings is called a

The published analysis and recommendations of an individual brokerage firm is called a

Trading stocks is much faster and less complicated if an individual investor has possession of the actual stock certificates.

Which of the following are characteristics of a wrap account? I. a flat amount of commission per transaction II. an increased probability of account churning III. a money manager IV. detailed performance reports

Which of the following designations does NOT have formal education and testing requirements?

The Investment Environment

Securities Markets and Transactions

Return and Risk

Modern Portfolio Concepts

Common Stocks

Analyzing Common Stocks

Stock Valuation

Market Efficiency and Behavioral Finance

Fixed-Income Securities

Bond Valuation

Mutual Funds and Exchange-Traded Funds

Managing Your Own Portfolio

Options: Puts and Calls

Futures Markets and Securities

Filters