Exam 11: Investment Planning

Which of the following is a characteristic of an organized securities exchange?

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. -Stockbrokers prefer clients who [buy and hold | trade actively.]

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 axiom that explains diversification is [Don't cry over spilt milk | Don't put all of your eggs in one basket].

Newly issued securities are sold to the public in the secondary market.

Which of the following are characteristics of a limit order?

Preferred stock combines the fixed income features of bonds with the same price appreciation potential as common stocks.

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. -Asset allocation is another term for [selecting the stocks you want to buy | deciding what percentage of your investment you want in stocks].

There are 50 shares in a round lot.

The bid price would be the price paid by an investor for an OTC stock.

Which of the following was not an intention of The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010?

____ is not a normal brokerage service.

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 immediate order to buy or sell common stock at the best price is a

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(n)[underwriting | prospectus] is a document made available to prospective security buyers that describes the firm and a new security issue.

A portfolio is a collection of investment assets assembled to meet your investment objectives.

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 owner of a bond would expect to receive [steady | variable] annual income.

If a company's shares are traded on the New York Stock Exchange,the company is a member of the exchange.

A retired couple can probably bear more risk in their portfolio than a young investor with a secure job.

You have inherited $250,000.You have decided that since you don't need the money currently,you should invest for the long-term.After seeking advice,you decide on an asset allocation plan that puts 10% in short-term securities,75% in equities,and 15% in bond funds.How much money would you put in each category? (Show all work.)

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 first thing you need to determine in order to reach an investment goal is the [rate of return you can receive | the amount of money you need to set aside periodically].