Exam 11: Investment Planning

The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 included several reforms aimed at reforming banks and insurance companies.

Owning common stock represents a debt investment.

A statement specifying how investment capital will be invested in order to reach targeted goals is called a marketing plan.

You have just bought 100 shares of ABC Corporation common stock at 70.50.The commission is calculated as 1.5% of the total value of the transaction plus $30.What commission will you be charged and how much must you pay the broker for the entire transaction? (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. -Ownership in a corporation would be represented by [stock | bonds].

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 issuer of the security would get no money from a trade in the [primary | secondary] market.

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.

Trading on margin can magnify losses or profits.

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

Two prerequisites to investing are above average risk and clear understanding of market direction.

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.

____ is a portfolio characteristic which leads to reduced risk with good return.

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. -Investments with high current income typically have [high | low] potential capital appreciation.

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

All OTC stocks are part of NASDAQ.

Listed securities are traded on organized exchanges.

The Federal Reserve Board (Fed)has the power to raise and lower the margin requirements for stock purchases.

On-line trading is the only valuable investment service available through the Internet.

The Securities and Exchange Commission sets margin requirements on security purchases.

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. -In terms of market capitalization,[Apple | IBM] is the biggest company in the world.