Exam 11: Investment Planning

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. -[2,000 | 148,800] shares of ABC stock were traded on this day.

The SIPC provides protection to the investor from

Minimum margin requirements that brokers must observe are set by the

NYSE Euronext is a part of the broker market accounting for 40% percent of global transactions.

The NYSE index includes all stocks listed on the "Big Board."

Diversification increases risk.

Portfolio management involves making decisions in order to

A retail stockbroker buys and sells securities on behalf of clients.

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. -You are going to buy stock on margin.You will be required to put up a minimum of [50 | 60] percent of the money needed to make the purchase.

A short sale transaction will be profitable when prices are falling.

According to recent legislation,under the FDIC each brokerage account is insured up to $250,000.

The single most important reason for investing is for

You have just bought (on margin)100 shares of IBM Corp.common stock for $108 per share.One year from now you expect to sell the stock for $140.The interest charge will be 9%.What return do you expect to earn on your investment? (Show all work.Ignore commissions.)

A diversified portfolio should be less risky than putting your money into a single security.

The federal margin requirement for common stock is 50%.

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 Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 included provisions to improve [accountability | sustainability].

A collection of investments is called

Securities sold in the primary markets are usually handled by a(n)

Stockbrokers are also known as

The most important investment prerequisites are