Question 1

Which of the following is the most important purpose of issuing a stop order?

Accepted Answer

A)  restricting the possible losses an investor is likely to incur 
B)  buying a stock if its price reaches a certain level 
C)  buying stock even without having adequate capital 
D)  buying a stock if its price falls below a certain level 
E)  minimizing the brokerage fee on a particular transaction 
A)  restricting the possible losses an investor is likely to incur 
B)  buying a stock if its price reaches a certain level 
C)  buying stock even without having adequate capital 
D)  buying a stock if its price falls below a certain level 
E)  minimizing the brokerage fee on a particular transaction

Question 2

What is load? What are no-load funds?

Accepted Answer

Load is the sales commission c

Question 3

With a zero-coupon bond the purchaser buys the bond at a discount from the face value.

Accepted Answer

A) True 
 B)False

Question 4

Compare and contrast common stock and preferred stock.

Accepted Answer

The primary reason that people invest in

Question 5

Funds that invest in a combination of stocks and bonds are called ________ funds.

Accepted Answer

A)  specialized 
B)  sector 
C)  restricted 
D)  balanced 
E)  socially responsible 
A)  specialized 
B)  sector 
C)  restricted 
D)  balanced 
E)  socially responsible

Question 6

Robex Retail forms a contract with one of its suppliers to buy specific amounts of agricultural produce at a later date.This contract is an example of a(n)________.

Accepted Answer

A)  financial future 
B)  put option 
C)  credit derivative 
D)  call option 
E)  commodities future 
A)  financial future 
B)  put option 
C)  credit derivative 
D)  call option 
E)  commodities future

Question 7

A bond's face value is $2000.Its coupon is 9 percent.The bond's present market value is $1800.What is the current yield of the bond?

Accepted Answer

A)  12 percent 
B)  6 percent 
C)  9 percent 
D)  8.1 percent 
E)  10 percent 
A)  12 percent 
B)  6 percent 
C)  9 percent 
D)  8.1 percent 
E)  10 percent

Question 8

The loans themselves are not transferred when a credit default swap is performed.

Accepted Answer

A) True 
 B)False

Question 9

Josephine would like to invest part of her Individual Retirement Account (IRA)in the stock market,but she wants to minimize the risk as much as possible.Which of the following is the most suitable investment alternative for Josephine?

Accepted Answer

A)  financial futures 
B)  derivatives 
C)  options 
D)  preferred stock 
E)  commodities futures 
A)  financial futures 
B)  derivatives 
C)  options 
D)  preferred stock 
E)  commodities futures

Question 10

You want to trade some of the futures that you have.Which of the following markets will facilitate such a trade?

Accepted Answer

A)  money market 
B)  bond market 
C)  stock market 
D)  currency market 
E)  derivatives market 
A)  money market 
B)  bond market 
C)  stock market 
D)  currency market 
E)  derivatives market

Question 11

Bear market is a market situation in which ________.

Accepted Answer

A)  there are more buyers than sellers 
B)  the value of assets are increasing 
C)  short selling is rarely observed 
D)  most stocks are declining in value 
E)  most portfolios are not diversified 
A)  there are more buyers than sellers 
B)  the value of assets are increasing 
C)  short selling is rarely observed 
D)  most stocks are declining in value 
E)  most portfolios are not diversified

Question 12

Jackson Associates is a firm that owns many stationary stores across the United States.The company's stock performance is highly linked to the overall performance of the stock market.The company's stock performs well when the economy and the stock market perform well and vice-versa.Jackson Associates is an example of a(n)________ stock.

Accepted Answer

A)  blue chip 
B)  penny 
C)  defensive 
D)  income 
E)  cyclical 
A)  blue chip 
B)  penny 
C)  defensive 
D)  income 
E)  cyclical

Question 13

A(n)________ is the purchased right,but not the obligation,to buy or sell a specified number of shares of a stock or other security at a predetermined price during a specified period.

Accepted Answer

A)  credit derivative 
B)  secured bond 
C)  option 
D)  financial future 
E)  commodity future 
A)  credit derivative 
B)  secured bond 
C)  option 
D)  financial future 
E)  commodity future

Question 14

A company's price/earnings ratio is determined by dividing the market value per share by the earnings per share.

Accepted Answer

A) True 
 B)False

Question 15

Which of the following is the basic premise of a derivative?

Accepted Answer

A)  limiting the value of an asset attached to them 
B)  transferring risk from one party to another 
C)  linking shares to governmental bonds 
D)  minimizing the risk for all parties involved 
E)  maximizing the dividend payout on equities 
A)  limiting the value of an asset attached to them 
B)  transferring risk from one party to another 
C)  linking shares to governmental bonds 
D)  minimizing the risk for all parties involved 
E)  maximizing the dividend payout on equities

Question 16

Money-market funds are financial instruments that invest in stocks considered to be selling below their true value.

Accepted Answer

A) True 
 B)False

Question 17

Go to a web site that allows you maintain a virtual portfolio (Example: Yahoo).Create a diversified portfolio in the web site.

Accepted Answer

This is an activity that stude

Question 18

Bonds issued by states,cities,and various government agencies to fund public projects are known as ________.

Accepted Answer

A)  treasury bonds 
B)  treasury bills 
C)  TIPS 
D)  treasury notes 
E)  municipal bonds 
A)  treasury bonds 
B)  treasury bills 
C)  TIPS 
D)  treasury notes 
E)  municipal bonds

Question 19

Currency futures are used to ________.

Accepted Answer

A)  reduce a lender's exposure to credit risk 
B)  buy commodities at a fixed price 
C)  avoid obligations to buy or sell assets 
D)  hedge against exchange rate shifts 
E)  reduce a borrower's exposure to credit risk 
A)  reduce a lender's exposure to credit risk 
B)  buy commodities at a fixed price 
C)  avoid obligations to buy or sell assets 
D)  hedge against exchange rate shifts 
E)  reduce a borrower's exposure to credit risk

Question 20

Bear market is a market situation in which most stocks are increasing in value.

Accepted Answer

A) True 
 B)False

Which of the following is the most important purpose of issuing a stop order?

What is load? What are no-load funds?

With a zero-coupon bond the purchaser buys the bond at a discount from the face value.

Compare and contrast common stock and preferred stock.

Funds that invest in a combination of stocks and bonds are called ________ funds.

Robex Retail forms a contract with one of its suppliers to buy specific amounts of agricultural produce at a later date.This contract is an example of a(n)________.

A bond's face value is $2000.Its coupon is 9 percent.The bond's present market value is $1800.What is the current yield of the bond?

The loans themselves are not transferred when a credit default swap is performed.

Josephine would like to invest part of her Individual Retirement Account (IRA)in the stock market,but she wants to minimize the risk as much as possible.Which of the following is the most suitable investment alternative for Josephine?

You want to trade some of the futures that you have.Which of the following markets will facilitate such a trade?

Bear market is a market situation in which ________.

A(n)________ is the purchased right,but not the obligation,to buy or sell a specified number of shares of a stock or other security at a predetermined price during a specified period.

A company's price/earnings ratio is determined by dividing the market value per share by the earnings per share.

Which of the following is the basic premise of a derivative?

Money-market funds are financial instruments that invest in stocks considered to be selling below their true value.

Go to a web site that allows you maintain a virtual portfolio (Example: Yahoo).Create a diversified portfolio in the web site.

Bonds issued by states,cities,and various government agencies to fund public projects are known as ________.

Currency futures are used to ________.

Bear market is a market situation in which most stocks are increasing in value.

Developing a Business Mindset

Understanding Basic Economics

The Global Marketplace

Business Ethics and Corporate Social Responsibility

Forms of Ownership

Entrepreneurship and Small Business Ownership

Management Roles, Functions, and Skills

Organization and Teamwork

Production Systems

Employee Motivation

Human Resources Management

Labor Relations

The Art and Science of Marketing

Product and Pricing Strategies

Distribution and Marketing Logistics

Customer Communication

Financial Information and Accounting Concepts

Financial Management

The Money Supply and Banking Systems

Filters

Exam 19: Financial Markets and Investment Strategies

Which of the following is the most important purpose of issuing a stop order?

What is load? What are no-load funds?

With a zero-coupon bond the purchaser buys the bond at a discount from the face value.

Compare and contrast common stock and preferred stock.

Funds that invest in a combination of stocks and bonds are called ________ funds.

Robex Retail forms a contract with one of its suppliers to buy specific amounts of agricultural produce at a later date.This contract is an example of a(n)________.

A bond's face value is $2000.Its coupon is 9 percent.The bond's present market value is $1800.What is the current yield of the bond?

The loans themselves are not transferred when a credit default swap is performed.

Josephine would like to invest part of her Individual Retirement Account (IRA)in the stock market,but she wants to minimize the risk as much as possible.Which of the following is the most suitable investment alternative for Josephine?

You want to trade some of the futures that you have.Which of the following markets will facilitate such a trade?

Bear market is a market situation in which ________.

A(n)________ is the purchased right,but not the obligation,to buy or sell a specified number of shares of a stock or other security at a predetermined price during a specified period.

A company's price/earnings ratio is determined by dividing the market value per share by the earnings per share.

Which of the following is the basic premise of a derivative?

Money-market funds are financial instruments that invest in stocks considered to be selling below their true value.

Go to a web site that allows you maintain a virtual portfolio (Example: Yahoo).Create a diversified portfolio in the web site.

Bonds issued by states,cities,and various government agencies to fund public projects are known as ________.

Currency futures are used to ________.

Bear market is a market situation in which most stocks are increasing in value.

Developing a Business Mindset

Understanding Basic Economics

The Global Marketplace

Business Ethics and Corporate Social Responsibility

Forms of Ownership

Entrepreneurship and Small Business Ownership

Management Roles, Functions, and Skills

Organization and Teamwork

Production Systems

Employee Motivation

Human Resources Management

Labor Relations

The Art and Science of Marketing

Product and Pricing Strategies

Distribution and Marketing Logistics

Customer Communication

Financial Information and Accounting Concepts

Financial Management

The Money Supply and Banking Systems

Filters