Question 1

When a brokerage house gives a margin call, you need to provide more collateral or your investment will be liquidated.

Accepted Answer

A) True 
 B)False

Question 2

Reviewing the amounts of income that you can realistically expect to receive from Social Security and your employee pension plan helps you to decide whether they will be adequate to meet your needs.

Accepted Answer

A) True 
 B)False

Question 3

Sheltering income from taxes is an illegitimate goal.

Accepted Answer

A) True 
 B)False

Question 4

Which of the following sections in an annual stockholders' report gives information on ongoing litigation?

Accepted Answer

A)  The chief executive's letter 
B)  Management's discussion and analysis 
C)  Income statement 
D)  Auditor's report 
E)  Notes about the financial statements 
A)  The chief executive's letter 
B)  Management's discussion and analysis 
C)  Income statement 
D)  Auditor's report 
E)  Notes about the financial statements

Question 5

A company that provides little information about its operations and has not filed its audited financial statements with the Securities and Exchange Commission (SEC) would trade its stock:

Accepted Answer

A)  on the OTC Bulletin Board (OTCB
B) . 
B)  in the OTC Pink Sheets. 
C)  on the National Association of Securities Dealers Automated Quotation System (Nasdaq). 
D)  on the New York Stock Exchange (NYS
E) . 
E)  on the American Stock Exchange (AMEX). 
A)  on the OTC Bulletin Board (OTCB
B) . 
B)  in the OTC Pink Sheets. 
C)  on the National Association of Securities Dealers Automated Quotation System (Nasdaq). 
D)  on the New York Stock Exchange (NYS
E) . 
E)  on the American Stock Exchange (AMEX).

Question 6

Megan invested in 10 bonds with a total face value of $5,000, issued by Zen Corporation. The bonds paid 10% semiannual interest until the maturity date. Which of the following is the value of interest earned in the first installment on a single bond?

Accepted Answer

A)  $50 
B)  $100 
C)  $500 
D)  $250 
E)  $75 
A)  $50 
B)  $100 
C)  $500 
D)  $250 
E)  $75

Question 7

Buying on margin allows you to purchase securities using 100% borrowed funds.

Accepted Answer

A) True 
 B)False

Question 8

Instructing your broker to buy or sell a stock at a particular price is a:

Accepted Answer

A)  limit order. 
B)  market order. 
C)  margin order. 
D)  regular order. 
E)  stop order. 
A)  limit order. 
B)  market order. 
C)  margin order. 
D)  regular order. 
E)  stop order.

Question 9

You bought 150 shares of XYZ Corporation 1 year ago at $187.50 per share. The stock is currently selling at $236.72. Over the year, XYZ paid dividends of $2.50 per share. What rate of return did you earn? (Show all work.)

Accepted Answer

Ending Value = 150 × $236.72 =

Question 10

_____ is a risky short-term investment activity.

Accepted Answer

A)  Purchasing life insurance 
B)  Buying real estate 
C)  Speculating in securities 
D)  Investing in mutual funds 
E)  Systematically saving for retirement 
A)  Purchasing life insurance 
B)  Buying real estate 
C)  Speculating in securities 
D)  Investing in mutual funds 
E)  Systematically saving for retirement

Question 11

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

Accepted Answer

A) True 
 B)False

Question 12

You have been offered an opportunity to buy shares of a collection of diversified securities. You will be investing in:

Accepted Answer

A)  bonds. 
B)  common stocks. 
C)  mutual funds. 
D)  real estate. 
E)  stock options. 
A)  bonds. 
B)  common stocks. 
C)  mutual funds. 
D)  real estate. 
E)  stock options.

Question 13

A stop-loss order:

Accepted Answer

A)  is the quickest way to have an order filled. 
B)  allows buy orders to be filled at the lowest price. 
C)  allows stocks to be purchased at the current market price. 
D)  sells a stock when the market price drops below a specified price. 
E)  is used to buy stocks at a 10% margin. 
A)  is the quickest way to have an order filled. 
B)  allows buy orders to be filled at the lowest price. 
C)  allows stocks to be purchased at the current market price. 
D)  sells a stock when the market price drops below a specified price. 
E)  is used to buy stocks at a 10% margin.

Question 14

Security selection to satisfy an asset allocation plan is final.

Accepted Answer

A) True 
 B)False

Question 15

INSTRUCTIONS: Choose the word or phrase in [ ] that 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. 
Publicly traded corporations [ are required to | may choose to ] provide its stockholders and other interested parties with annual stockholders' reports.

Accepted Answer

The answer of INSTRUCTIONS: Choose the word or phrase in...

Question 16

A bear market condition is associated with:

Accepted Answer

A)  investor optimism. 
B)  declining securities prices. 
C)  economic recovery. 
D)  an increased tax rate. 
E)  high returns. 
A)  investor optimism. 
B)  declining securities prices. 
C)  economic recovery. 
D)  an increased tax rate. 
E)  high returns.

Question 17

Which of the following is an order to sell a stock when the market price drops to or below a specified level?

Accepted Answer

A)  A market order 
B)  A limit order 
C)  A stop-loss order 
D)  A fill-or-kill order 
E)  A day order 
A)  A market order 
B)  A limit order 
C)  A stop-loss order 
D)  A fill-or-kill order 
E)  A day order

Question 18

The Sarbanes-Oxley Act of 2002 led to the creation of the National Association of Securities Dealers (NASD).

Accepted Answer

A) True 
 B)False

Question 19

INSTRUCTIONS: Choose the word or phrase in [ ] that 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 ].

Accepted Answer

The answer of INSTRUCTIONS: Choose the word or phrase in...

Question 20

Mathew purchased 100 shares of Blue Corporation for $100 per share. Currently, the stocks of Blue Corporation are trading at $150. Which of the following is the rate of return on Mathew's investment in one share?

Accepted Answer

A)  65% 
B)  50% 
C)  75% 
D)  80% 
E)  40% 
A)  65% 
B)  50% 
C)  75% 
D)  80% 
E)  40%

When a brokerage house gives a margin call, you need to provide more collateral or your investment will be liquidated.

Reviewing the amounts of income that you can realistically expect to receive from Social Security and your employee pension plan helps you to decide whether they will be adequate to meet your needs.

Sheltering income from taxes is an illegitimate goal.

Which of the following sections in an annual stockholders' report gives information on ongoing litigation?

A company that provides little information about its operations and has not filed its audited financial statements with the Securities and Exchange Commission (SEC) would trade its stock:

Megan invested in 10 bonds with a total face value of $5,000, issued by Zen Corporation. The bonds paid 10% semiannual interest until the maturity date. Which of the following is the value of interest earned in the first installment on a single bond?

Buying on margin allows you to purchase securities using 100% borrowed funds.

Instructing your broker to buy or sell a stock at a particular price is a:

You bought 150 shares of XYZ Corporation 1 year ago at $187.50 per share. The stock is currently selling at $236.72. Over the year, XYZ paid dividends of $2.50 per share. What rate of return did you earn? (Show all work.)

_____ is a risky short-term investment activity.

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

You have been offered an opportunity to buy shares of a collection of diversified securities. You will be investing in:

A stop-loss order:

Security selection to satisfy an asset allocation plan is final.

A bear market condition is associated with:

Which of the following is an order to sell a stock when the market price drops to or below a specified level?

The Sarbanes-Oxley Act of 2002 led to the creation of the National Association of Securities Dealers (NASD).

Mathew purchased 100 shares of Blue Corporation for $100 per share. Currently, the stocks of Blue Corporation are trading at $150. Which of the following is the rate of return on Mathew's investment in one share?

Understanding the Financial Planning Process

Developing Your Financial Statements and Plans

Preparing Your Taxes

Managing Your Cash and Savings

Making Automobile and Housing Decisions

Using Credit

Using Consumer Loans

Insuring Your Life

Insuring Your Health

Protecting Your Property

Investing in Stocks and Bonds

Investing in Mutual Funds and Real Estate

Planning for Retirement

Preserving Your Estate

Filters

Exam 11: Investment Planning

When a brokerage house gives a margin call, you need to provide more collateral or your investment will be liquidated.

Reviewing the amounts of income that you can realistically expect to receive from Social Security and your employee pension plan helps you to decide whether they will be adequate to meet your needs.

Sheltering income from taxes is an illegitimate goal.

Which of the following sections in an annual stockholders' report gives information on ongoing litigation?

A company that provides little information about its operations and has not filed its audited financial statements with the Securities and Exchange Commission (SEC) would trade its stock:

Megan invested in 10 bonds with a total face value of $5,000, issued by Zen Corporation. The bonds paid 10% semiannual interest until the maturity date. Which of the following is the value of interest earned in the first installment on a single bond?

Buying on margin allows you to purchase securities using 100% borrowed funds.

Instructing your broker to buy or sell a stock at a particular price is a:

You bought 150 shares of XYZ Corporation 1 year ago at $187.50 per share. The stock is currently selling at $236.72. Over the year, XYZ paid dividends of $2.50 per share. What rate of return did you earn? (Show all work.)

_____ is a risky short-term investment activity.

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

You have been offered an opportunity to buy shares of a collection of diversified securities. You will be investing in:

A stop-loss order:

Security selection to satisfy an asset allocation plan is final.

A bear market condition is associated with:

Which of the following is an order to sell a stock when the market price drops to or below a specified level?

The Sarbanes-Oxley Act of 2002 led to the creation of the National Association of Securities Dealers (NASD).

Mathew purchased 100 shares of Blue Corporation for $100 per share. Currently, the stocks of Blue Corporation are trading at $150. Which of the following is the rate of return on Mathew's investment in one share?

Understanding the Financial Planning Process

Developing Your Financial Statements and Plans

Preparing Your Taxes

Managing Your Cash and Savings

Making Automobile and Housing Decisions

Using Credit

Using Consumer Loans

Insuring Your Life

Insuring Your Health

Protecting Your Property

Investing in Stocks and Bonds

Investing in Mutual Funds and Real Estate

Planning for Retirement

Preserving Your Estate

Filters