Question 1

________ are contracts whose value is derived from some other entity.

Accepted Answer

A)  Preference shares 
B)  Derivatives 
C)  Equities 
D)  Secured bonds 
E)  Unsecured bonds 
A)  Preference shares 
B)  Derivatives 
C)  Equities 
D)  Secured bonds 
E)  Unsecured bonds

Question 2

________ refer to short-term debt securities issued by the federal government.

Accepted Answer

A)  Municipal bonds 
B)  Treasury bills 
C)  TIPS 
D)  Treasury notes 
E)  Treasury bonds 
A)  Municipal bonds 
B)  Treasury bills 
C)  TIPS 
D)  Treasury notes 
E)  Treasury bonds

Question 3

Maturity date is the date on which ________.

Accepted Answer

A)  interest will be paid every month to a bond's investors 
B)  interest will be paid every year to a bond's investors 
C)  a bond will be converted to a common stock 
D)  the principle of a bond will be repaid in full 
E)  an installment of interest will be paid to investors of bonds 
A)  interest will be paid every month to a bond's investors 
B)  interest will be paid every year to a bond's investors 
C)  a bond will be converted to a common stock 
D)  the principle of a bond will be repaid in full 
E)  an installment of interest will be paid to investors of bonds

Question 4

Explain the advantages and disadvantages of investing in bonds rather than in stocks.

Accepted Answer

Advantages:1)Bonds are less risky than s

Question 5

________ ratio is calculated by dividing the market value per share by the earnings per share.

Accepted Answer

A)  Return on capital 
B)  Price/earnings 
C)  Sales/income 
D)  Gross value 
E)  Gross margin 
A)  Return on capital 
B)  Price/earnings 
C)  Sales/income 
D)  Gross value 
E)  Gross margin

Question 6

With a zero-coupon bond,the ________.

Accepted Answer

A)  purchaser buys the bond at a discount from the face value 
B)  full face value is not paid to the investor at maturity 
C)  investor receives interest on a regular basis 
D)  interest is paid immediately after a bond is purchased 
E)  purchaser buys a bond by paying exactly the face value 
A)  purchaser buys the bond at a discount from the face value 
B)  full face value is not paid to the investor at maturity 
C)  investor receives interest on a regular basis 
D)  interest is paid immediately after a bond is purchased 
E)  purchaser buys a bond by paying exactly the face value

Question 7

A(n)________ is a contract to buy or sell a financial instrument for a set price at a later date.

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 8

Mutual fund's assets - its liabilities = ________.

Accepted Answer

A)  net asset value 
B)  face value 
C)  par value 
D)  load value 
E)  market value 
A)  net asset value 
B)  face value 
C)  par value 
D)  load value 
E)  market value

Question 9

Stock of companies whose earnings tend to track the ups and downs of the economy in a predictable pattern are known as defensive stocks.

Accepted Answer

A) True 
 B)False

Question 10

Stock exchanges are organizations that ________.

Accepted Answer

A)  issue cash in exchange for pledging stock 
B)  function as underwriters in public issues 
C)  facilitate the buying and selling of stock 
D)  issue stock on behalf of small companies 
E)  combine multiple stocks to create mutual funds 
A)  issue cash in exchange for pledging stock 
B)  function as underwriters in public issues 
C)  facilitate the buying and selling of stock 
D)  issue stock on behalf of small companies 
E)  combine multiple stocks to create mutual funds

Question 11

Short selling refers to selling ________.

Accepted Answer

A)  a stock at a price much above the market price 
B)  stocks partially from an investor's portfolio 
C)  stock borrowed from a broker 
D)  a contract to sell a product at a later date 
E)  a stock at a price much below the market price 
A)  a stock at a price much above the market price 
B)  stocks partially from an investor's portfolio 
C)  stock borrowed from a broker 
D)  a contract to sell a product at a later date 
E)  a stock at a price much below the market price

Question 12

Dobex Investing is a fund management company.Most of the firm's funds are invested in a wide mixture of stocks and bonds.Such funds are called ________ funds.

Accepted Answer

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

Question 13

A put option is purchased when the buyer believes that the ________.

Accepted Answer

A)  price of underlying stock will have no effect on options 
B)  price of underlying stock will decrease 
C)  option will not be profitable 
D)  price of underlying stock will increase 
E)  price of underlying stock will remain constant 
A)  price of underlying stock will have no effect on options 
B)  price of underlying stock will decrease 
C)  option will not be profitable 
D)  price of underlying stock will increase 
E)  price of underlying stock will remain constant

Question 14

Most trading in the bond market occurs over the counter and takes place outside organized exchanges.

Accepted Answer

A) True 
 B)False

Question 15

Which of the following is an example of a call option?

Accepted Answer

A)  a purchased right that gives the right to buy a stock at a fixed price until an expiration date 
B)  a contract to buy amounts of specified currency at some future date 
C)  a contract to sell a foreign currency for a set price without an expiry date 
D)  a contract to sell a treasury bond for a set price without an expiry date 
E)  a purchased right that gives the right to sell the stock at a fixed price until the expiration date 
A)  a purchased right that gives the right to buy a stock at a fixed price until an expiration date 
B)  a contract to buy amounts of specified currency at some future date 
C)  a contract to sell a foreign currency for a set price without an expiry date 
D)  a contract to sell a treasury bond for a set price without an expiry date 
E)  a purchased right that gives the right to sell the stock at a fixed price until the expiration date

Question 16

James wants to buy some shares of JE Electricals.He instructs the broker to buy 1000 shares at the best possible price immediately.This is an example of a(n)________.

Accepted Answer

A)  market order 
B)  control order 
C)  limit order 
D)  stop order 
E)  bounded order 
A)  market order 
B)  control order 
C)  limit order 
D)  stop order 
E)  bounded order

Question 17

________ stocks tend to fare better when the economy is doing worse and vice versa.

Accepted Answer

A)  Blue chip 
B)  Income 
C)  Penny 
D)  Cyclical 
E)  Defensive 
A)  Blue chip 
B)  Income 
C)  Penny 
D)  Cyclical 
E)  Defensive

Question 18

Stop order is an order to sell a stock when ________.

Accepted Answer

A)  an order is placed by a specific buyer in the stock exchange 
B)  its price falls to a particular point 
C)  its p/e ratio crosses a certain level 
D)  brokerage cost is lower than a specified amount 
E)  overall price index of the stock exchange exceeds a certain amount 
A)  an order is placed by a specific buyer in the stock exchange 
B)  its price falls to a particular point 
C)  its p/e ratio crosses a certain level 
D)  brokerage cost is lower than a specified amount 
E)  overall price index of the stock exchange exceeds a certain amount

Question 19

The amount of money or principle that the purchaser of a bond lends to the bond issuer is known as its coupon.

Accepted Answer

A) True 
 B)False

Question 20

Balanced funds refer to funds that invest in a combination of stocks and bonds.

Accepted Answer

A) True 
 B)False

________ are contracts whose value is derived from some other entity.

________ refer to short-term debt securities issued by the federal government.

Maturity date is the date on which ________.

Explain the advantages and disadvantages of investing in bonds rather than in stocks.

________ ratio is calculated by dividing the market value per share by the earnings per share.

With a zero-coupon bond,the ________.

A(n)________ is a contract to buy or sell a financial instrument for a set price at a later date.

Mutual fund's assets - its liabilities = ________.

Stock of companies whose earnings tend to track the ups and downs of the economy in a predictable pattern are known as defensive stocks.

Stock exchanges are organizations that ________.

Short selling refers to selling ________.

Dobex Investing is a fund management company.Most of the firm's funds are invested in a wide mixture of stocks and bonds.Such funds are called ________ funds.

A put option is purchased when the buyer believes that the ________.

Most trading in the bond market occurs over the counter and takes place outside organized exchanges.

Which of the following is an example of a call option?

James wants to buy some shares of JE Electricals.He instructs the broker to buy 1000 shares at the best possible price immediately.This is an example of a(n)________.

________ stocks tend to fare better when the economy is doing worse and vice versa.

Stop order is an order to sell a stock when ________.

The amount of money or principle that the purchaser of a bond lends to the bond issuer is known as its coupon.

Balanced funds refer to funds that invest in a combination of stocks and bonds.

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

________ are contracts whose value is derived from some other entity.

________ refer to short-term debt securities issued by the federal government.

Maturity date is the date on which ________.

Explain the advantages and disadvantages of investing in bonds rather than in stocks.

________ ratio is calculated by dividing the market value per share by the earnings per share.

With a zero-coupon bond,the ________.

A(n)________ is a contract to buy or sell a financial instrument for a set price at a later date.

Mutual fund's assets - its liabilities = ________.

Stock of companies whose earnings tend to track the ups and downs of the economy in a predictable pattern are known as defensive stocks.

Stock exchanges are organizations that ________.

Short selling refers to selling ________.

Dobex Investing is a fund management company.Most of the firm's funds are invested in a wide mixture of stocks and bonds.Such funds are called ________ funds.

A put option is purchased when the buyer believes that the ________.

Most trading in the bond market occurs over the counter and takes place outside organized exchanges.

Which of the following is an example of a call option?

James wants to buy some shares of JE Electricals.He instructs the broker to buy 1000 shares at the best possible price immediately.This is an example of a(n)________.

________ stocks tend to fare better when the economy is doing worse and vice versa.

Stop order is an order to sell a stock when ________.

The amount of money or principle that the purchaser of a bond lends to the bond issuer is known as its coupon.

Balanced funds refer to funds that invest in a combination of stocks and bonds.

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