Question 1

IBM is considering hiring an investment banker who will purchase and subsequently resell an issue of stock for them.This service is called

Accepted Answer

A)  stock brokerage.
B)  full-service brokerage.
C)  underwriting.
D)  churning.
E)  none of the above.F) C) and D)
G) A) and C)

Question 2

According to the Keown book,overconfidence afflicts women more often than men,and it also leads women to trade too often.

Accepted Answer

A) True 
 B)False

Question 3

Describe the sources of risk in the risk-return trade off.

Accepted Answer

The interest rate risk is the risk of fl...

Question 4

The OTC market is a link-up of dealers,with stringent listing and membership requirements.

Accepted Answer

A) True 
 B)False

Question 5

You specify that your trade is to be made only at a certain price or better.You are placing a(n)

Accepted Answer

A)  stop order.
B)  limit order.
C)  market order.
D)  open order.
E)  closed order.F) All of the above
G) B) and C)

Question 6

If the total rate of return is multiplied by 1/N,where N is the number of years for which the investment was held,the result is the

Accepted Answer

A)  serialized rate of return.
B)  annualized rate of return.
C)  tax-free rate of return.
D)  capitalized rate of return.E) B) and C)
F) A) and B)

Question 7

The ________ rate is the interest to be paid annually on a bond as a percentage of its par value.

Accepted Answer

A)  base
B)  coupon interest
C)  face interest
D)  compound interest
E)  none of the aboveF) A) and D)
G) D) and E)

Question 8

The difference between an investment and speculation is that an investment ________ while speculation depends solely on ________ to produce results.

Accepted Answer

A)  costs less;the economic conditions
B)  generates a return;supply and demand
C)  costs less;generating a return
D)  depends on supply and demand;economic conditions
E)  depends on supply and demand;generating a returnF) All of the above
G) A) and E)

Question 9

Diversification works in one's portfolio because stock returns in one's portfolio do not always move in the same direction;as a result,the upswings and downturns in one's portfolio eliminate one another.

Accepted Answer

A) True 
 B)False

Question 10

The Internet is full of investment information,and all of it is stringently regulated so you can be sure of its reliability.

Accepted Answer

A) True 
 B)False

Question 11

As a young college graduate,your biggest investment ally is

Accepted Answer

A)  leverage.
B)  the amount of investment.
C)  tax-free investments.
D)  time.
E)  the class of investments.F) A) and B)
G) B) and D)

Question 12

A limit order specifies a securities trade is to be made only at a certain price or better.

Accepted Answer

A) True 
 B)False

Question 13

A margin call requires you to replenish the margin account by adding additional cash or securities to bring the account back up to the minimum.

Accepted Answer

A) True 
 B)False

Question 14

Jennifer has money invested in stocks.She earns a return on her investment,which is a portion of the company's profits,called

Accepted Answer

A)  interest.
B)  a return.
C)  dividends.
D)  growth.
E)  retained earnings.F) B) and D)
G) C) and E)

Question 15

Underwriting the issue takes place in which market?

Accepted Answer

A)  Secondary
B)  Primary
C)  Seasonal
D)  CreditE) None of the above
F) A) and D)

Question 16

Merrill Lynch,Edward Jones and Morgan Stanley Smith Barney are all full service brokers.

Accepted Answer

A) True 
 B)False

Question 17

Investing in bonds tends to be riskier financial strategy than investing in common stocks.

Accepted Answer

A) True 
 B)False

Question 18

Investing prior to age 54 is a time of ________ by investing the majority of one's savings into ________.

Accepted Answer

A)  wealth preservation;conservative funds
B)  wealth preservation;preferred stocks
C)  wealth accumulation;common stocks
D)  wealth accumulation;bonds
E)  wealth dispersal;common and preferred stocksF) B) and C)
G) B) and D)

Question 19

A day trader typically sits at a computer and looks for stocks that are moving up or down in value.

Accepted Answer

A) True 
 B)False

Question 20

Long term capital gains may be taxed at ________ percent,depending on tax bracket.

Accepted Answer

A)  8
B)  10
C)  15
D)  25
E)  40F) C) and D)
G) A) and E)

Exam 11: Investment Basics

IBM is considering hiring an investment banker who will purchase and subsequently resell an issue of stock for them.This service is called

Correct AnswerverifiedShow Answer

Describe the sources of risk in the risk-return trade off.

Correct AnswerverifiedThe interest rate risk is the risk of fl...View AnswerShow Answer

Long term capital gains may be taxed at ________ percent,depending on tax bracket.

Correct AnswerverifiedShow Answer

Investing prior to age 54 is a time of ________ by investing the majority of one's savings into ________.

Correct AnswerverifiedShow Answer

Diversification works in one's portfolio because stock returns in one's portfolio do not always move in the same direction;as a result,the upswings and downturns in one's portfolio eliminate one another.

Correct AnswerverifiedShow Answer

The Internet is full of investment information,and all of it is stringently regulated so you can be sure of its reliability.

Correct AnswerverifiedShow Answer

According to the Keown book,overconfidence afflicts women more often than men,and it also leads women to trade too often.

Correct AnswerverifiedShow Answer

The OTC market is a link-up of dealers,with stringent listing and membership requirements.

Correct AnswerverifiedShow Answer

Underwriting the issue takes place in which market?

Correct AnswerverifiedShow Answer

A margin call requires you to replenish the margin account by adding additional cash or securities to bring the account back up to the minimum.

Correct AnswerverifiedShow Answer

A limit order specifies a securities trade is to be made only at a certain price or better.

Correct AnswerverifiedShow Answer

The difference between an investment and speculation is that an investment ________ while speculation depends solely on ________ to produce results.

Correct AnswerverifiedShow Answer

As a young college graduate,your biggest investment ally is

Correct AnswerverifiedShow Answer

You specify that your trade is to be made only at a certain price or better.You are placing a(n)

Correct AnswerverifiedShow Answer

A day trader typically sits at a computer and looks for stocks that are moving up or down in value.

Correct AnswerverifiedShow Answer

If the total rate of return is multiplied by 1/N,where N is the number of years for which the investment was held,the result is the

Correct AnswerverifiedShow Answer

Merrill Lynch,Edward Jones and Morgan Stanley Smith Barney are all full service brokers.

Correct AnswerverifiedShow Answer

The ________ rate is the interest to be paid annually on a bond as a percentage of its par value.

Correct AnswerverifiedShow Answer

Jennifer has money invested in stocks.She earns a return on her investment,which is a portion of the company's profits,called

Correct AnswerverifiedShow Answer

Investing in bonds tends to be riskier financial strategy than investing in common stocks.

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified
The interest rate risk is the risk of fl...
View Answer

Correct Answer
verified

Investing prior to age 54 is a time of by investing the majority of one's savings into .

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

The difference between an investment and speculation is that an investment while speculation depends solely on to produce results.

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified