Question 1

The two financial markets in which securities are sold are the

Accepted Answer

A)  United States exchange and the global exchange. 
B)  New York Stock Exchange and the NASDAQ. 
C)  open market and the closed market. 
D)  short-term market and the long-term market. 
E)  primary market and the secondary market.

Question 2

The money derived from the sale of the stocks or bonds goes to

Accepted Answer

A)  a fund held by the SEC. 
B)  the issuer. 
C)  the buyer. 
D)  other stockholders. 
E)  the executive board of the company.

Question 3

Marcela is a professional investor and is preparing to research the general movement of U.S. stock prices. As she sits down to her computer, which website would most likely provide Marcela with a picture of the total stock market?

Accepted Answer

A)  NASDAQ Composite Index 
B)  Wilshire 5000 
C)  Security Exchange Commission 
D)  Standard & Poor's 500 
E)  Dow Jones Industrial Average

Question 4

Your hometown is looking to build a new multi purpose stadium for the local semi pro soccer team. Proceeds from ticket sales go directly to the city. In order to fund the stadium, the city has decided to issue bonds. The bonds can be best classified as a ________ bond.

Accepted Answer

A)  mutual, general obligation 
B)  municipal, secured 
C)  callable, revenue 
D)  municipal, revenue 
E)  treasury, callable

Question 5

Liorit has been monitoring a specific stock for the past month. He calls his broker and tells him to buy 20 shares when he feels the price is most optimum. This can be best described as a ________ order.

Accepted Answer

A)  market 
B)  discount 
C)  discretionary 
D)  limit 
E)  speculative

Question 6

The ________ index is referred to as "the total stock market index."

Accepted Answer

A)  Dow Jones Industrial Average 
B)  NASDAQ Composite Index 
C)  Wilshire 5000 
D)  NYSE 500 
E)  Standard & Poor's 500

Question 7

Which statement describes investing for growth?

Accepted Answer

A)  I want an attractive return over the long haul without having to constantly track my investments. 
B)  I want a steady flow of income, even though the value of the investments won't increase much. 
C)  I want to increase my wealth fast and am willing to take risks. 
D)  I'm willing to risk my time and money hunting for undervalued stocks that might become profitable. 
E)  I'm willing to take big risks and pay very close attention to buy low and sell high for quick profits.

Question 8

Provide an overview of the ways that stocks are valued.

Accepted Answer

The answer of Provide an overview of the ways that...

Question 9

Keston left his career in information technology to focus on investing. He loves the thrill of taking a risk that could lead to income. His favorite investment activity centers around buying stock at a low price and then quickly selling it at a higher price. Which investment strategy does this best represent?

Accepted Answer

A)  investing for income 
B)  buying and holding 
C)  market timing 
D)  value investing 
E)  investing for growth

Question 10

Latosha has a broker she uses to make trades for her and to give her investment advice based on research. What type of broker does Latosha use?

Accepted Answer

A)  research-oriented 
B)  discount 
C)  transaction based 
D)  traditional 
E)  investment

Question 11

Loren's broker knows Loren doesn't know anything about how the stock market works, so she advises him to trust her to decide when to buy and sell. This illustrates ________ orders.

Accepted Answer

A)  market 
B)  limit 
C)  discretionary 
D)  cost 
E)  value

Question 12

Carina is considering the purchase of stock in a company. She tells her broker about her interest. At this point the broker must provide Carina with a

Accepted Answer

A)  strategy. 
B)  portfolio. 
C)  speculation. 
D)  disclosure. 
E)  prospectus.

Question 13

Irene and Serena recently were married. They want to ensure they start investing for their future, so they sit down to review their income. When they are done, they want to reach an agreement as to how much they will invest from each of their respective paychecks. Which of the factors that make up an investor's profile does this best represent?

Accepted Answer

A)  goals 
B)  risk 
C)  available funds 
D)  taxes 
E)  speculation

Question 14

Aeron owns shares of a mutual fund and decides to purchase additional shares. After making the purchase he notices that he was charged a 3 percent commission. Aeron's mutual fund can best be described as a(n) _______ fund.

Accepted Answer

A)  exchange-traded 
B)  hybrid 
C)  load 
D)  asset 
E)  no-load

Question 15

Kahina keeps a very close eye on world affairs and always considers how particular issues might impact the financial environment. If she sees an issue, Kahina is quick to adjust her investments to adapt to the changes. Which of the factors that make up an investor's profile does this best represent?

Accepted Answer

A)  asset allocation 
B)  available funds 
C)  speculation 
D)  liquidity 
E)  risk

Question 16

Diana is planning to begin investing, so she schedules time to do some research. Diana is intrigued when she finds some information about a type of investment that interests her. While there are some fees associated with the investment, she will be able to easily spread out her risk thanks to the many different options that are available. The investments are also professionally managed, so she can read a short summary before purchasing any shares without having to do any research. Diana has most likely discovered

Accepted Answer

A)  mutual funds. 
B)  revenue bonds. 
C)  commodities. 
D)  preferred stock. 
E)  exchange-traded funds.

Question 17

Rasheed is considering purchasing stock in a few companies. He wants to start by researching whether the stock for any of the companies is underpriced at this time. Rasheed's best course of action would be to review the ________ for each stock.

Accepted Answer

A)  maturity value 
B)  par value 
C)  dividend value 
D)  book value 
E)  market value

Question 18

Define the three types of securities and provide at least two examples of each one.

Accepted Answer

The answer of Define the three types of securities and...

Question 19

E-Trade is a ________ broker because it doesn't offer advice or tax planning and charges a low fee for trades.

Accepted Answer