Exam 11: Investment Planning

A portfolio is a collection of investment vehicles assembled to meet an investment goal.

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement.Select A for the first item,B for the second item,and C if neither item will correctly complete the statement. -Diversification should [reduce the possibility of losing all your money | have little impact on the risk of losing money].

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement.Select A for the first item,B for the second item,and C if neither item will correctly complete the statement. -The Securities Investors Protection Corporation would make payment to you if [the corporation in which you bought stock | the brokerage firm holding your stock] went bankrupt.

There is a trade-off between earning a high current income from an investment and obtaining significant capital appreciation from it.

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement.Select A for the first item,B for the second item,and C if neither item will correctly complete the statement. -When you sell short,the proceeds of the sale will be [held until the sale is covered | given to you immediately after the sale].

Mutual funds provide professional management and diversification that individual investors - especially those with limited resources - can rarely obtain on their own.

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement.Select A for the first item,B for the second item,and C if neither item will correctly complete the statement. -Two hundred shares of stock would constitute [an odd lot | a round lot].

Which of the following is a true statement about the Dow Jones Industrial Average?

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement.Select A for the first item,B for the second item,and C if neither item will correctly complete the statement. -Before you start investing,you should plan to have a minimum of [$1,000 | $15,000] available.

An odd lot transaction is generally more expensive than a round lot transaction.

An unmarried investor with few responsibilities should be able to accept ____ better than two people who are married with young children.

What was the closing price of Stock C on the previous trading day?

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement.Select A for the first item,B for the second item,and C if neither item will correctly complete the statement. -The majority of the securities laws were enacted [before | after] 1930.

Which of the following is not an example of the financial press?

How much would it cost to purchase a round lot (the smallest number you can get and still be a round lot)of Stock A at the closing price for the day?

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement.Select A for the first item,B for the second item,and C if neither item will correctly complete the statement. -A [broker | investor] can be a member of a "syndicate" when taking orders for a new IPO.

Seats on the security exchanges are rented by stock brokerage firms.

Discount brokers discount the price of securities to below the prevailing market price.

A stock portfolio containing 80% common stocks is most likely to be appropriate for

When a brokerage house holds your securities for you,they hold them in a street name.