Question 1

_____ is a process to settle disputes between a brokerage firm and its clients.

Accepted Answer

A)  Diversification 
B)  Estate planning 
C)  Arbitration 
D)  Asset allocation 
E)  Portfolio tracking 
A)  Diversification 
B)  Estate planning 
C)  Arbitration 
D)  Asset allocation 
E)  Portfolio tracking

Question 2

A potential investor in a new issue must be given a(n):

Accepted Answer

A)  annual stockholders' report. 
B)  investment newsletter. 
C)  established brokerage fee schedule. 
D)  prospectus. 
E)  brokerage report. 
A)  annual stockholders' report. 
B)  investment newsletter. 
C)  established brokerage fee schedule. 
D)  prospectus. 
E)  brokerage report.

Question 3

Diversification of investment securities increases risk.

Accepted Answer

A) True 
 B)False

Question 4

An _____ provides financial and descriptive information about a firm's operations in the recent past to stockholders and other interested parties.

Accepted Answer

A)  annual stockholders' report 
B)  annual tax report 
C)  annual portfolio report 
D)  annual research report 
E)  annual education report 
A)  annual stockholders' report 
B)  annual tax report 
C)  annual portfolio report 
D)  annual research report 
E)  annual education report

Question 5

Online trading is the only valuable investment service available through the Internet.

Accepted Answer

A) True 
 B)False

Question 6

Which of the following is a difference between an exchange-traded fund (ETF) and a mutual fund?

Accepted Answer

A)  An ETF is a fixed-income instrument, whereas a mutual fund is a variable-income instrument. 
B)  An ETF can only be traded at the end of the day, whereas a mutual fund can be bought or sold throughout the trading day. 
C)  An ETF provides more favorable tax treatment than a mutual fund. 
D)  An ETF is a convertible security, whereas a mutual fund is a nonconvertible security. 
E)  An ETF is a hybrid security, whereas a mutual fund is not a hybrid security. 
A)  An ETF is a fixed-income instrument, whereas a mutual fund is a variable-income instrument. 
B)  An ETF can only be traded at the end of the day, whereas a mutual fund can be bought or sold throughout the trading day. 
C)  An ETF provides more favorable tax treatment than a mutual fund. 
D)  An ETF is a convertible security, whereas a mutual fund is a nonconvertible security. 
E)  An ETF is a hybrid security, whereas a mutual fund is not a hybrid security.

Question 7

Stockbrokers are also known as:

Accepted Answer

A)  market makers. 
B)  account executives. 
C)  underwriters. 
D)  commission sellers. 
E)  traders. 
A)  market makers. 
B)  account executives. 
C)  underwriters. 
D)  commission sellers. 
E)  traders.

Question 8

Which of the following statements about exchange-traded notes (ETNs) is true?

Accepted Answer

A)  ETNs are more similar to mutual funds than to exchange-traded funds (ETFs). 
B)  ETNs are backed only by the issuer of the creditor. 
C)  ETNs have no maturity dates. 
D)  ETNs cannot be sold short. 
E)  ETNs can be bought or sold only at the end of the day. 
A)  ETNs are more similar to mutual funds than to exchange-traded funds (ETFs). 
B)  ETNs are backed only by the issuer of the creditor. 
C)  ETNs have no maturity dates. 
D)  ETNs cannot be sold short. 
E)  ETNs can be bought or sold only at the end of the day.

Question 9

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. 
Day trading is [ illegal | unethical ].

Accepted Answer

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

Question 10

The _____ is often used as a benchmark in assessing the price behavior of high-tech stocks.

Accepted Answer

A)  Standard & Poor's (S&P) composite index 
B)  Dow Jones Industrial Average (DJI
A)  
C)  New York Stock Exchange (NYS
E)  index 
D)  Dow Jones Wilshire 5000 index 
E)  National Association of Securities Dealers Automated Quotation System (Nasdaq) Composite index 
A)  Standard & Poor's (S&P) composite index 
B)  Dow Jones Industrial Average (DJI
A)  
C)  New York Stock Exchange (NYS
E)  index 
D)  Dow Jones Wilshire 5000 index 
E)  National Association of Securities Dealers Automated Quotation System (Nasdaq) Composite index

Question 11

Two investment prerequisites that are essential to developing a successful investment program are:

Accepted Answer

A)  ample income and debt. 
B)  ample income and confidential information. 
C)  ample insurance and liquidity. 
D)  an investment plan and a nonmonetary goal. 
E)  inconsistency and risk awareness. 
A)  ample income and debt. 
B)  ample income and confidential information. 
C)  ample insurance and liquidity. 
D)  an investment plan and a nonmonetary goal. 
E)  inconsistency and risk awareness.

Question 12

Which of the following statements regarding broker markets is true?

Accepted Answer

A)  In a broker market, buy/sell orders are executed separately through securities dealers. 
B)  A key feature of the broker market is that it doesn't have centralized trading floors. 
C)  The biggest broker market is made up of a select list of stocks that are traded on the National Association of Securities Dealers Automated Quotation System (Nasdaq). 
D)  Broker markets account for about 40% of all shares traded in the U.S. market. 
E)  The broker market consists of national and regional "securities exchanges." 
A)  In a broker market, buy/sell orders are executed separately through securities dealers. 
B)  A key feature of the broker market is that it doesn't have centralized trading floors. 
C)  The biggest broker market is made up of a select list of stocks that are traded on the National Association of Securities Dealers Automated Quotation System (Nasdaq). 
D)  Broker markets account for about 40% of all shares traded in the U.S. market. 
E)  The broker market consists of national and regional "securities exchanges."

Question 13

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. 
Margin requirements are set by the [ Securities and Exchange Commission ( SEC) | Federal Reserve Board ].

Accepted Answer

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

Question 14

Brokers prefer active traders to buy-and-hold investors.

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

Accepted Answer

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

Question 16

Online trading is financially safer than trading with a human broker.

Accepted Answer

A) True 
 B)False

Question 17

The _____ contains the so-called Volcker Rule, which prohibits depository banks from proprietary trading.

Accepted Answer

A)  Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 
B)  Sarbanes-Oxley Act of 2002 
C)  Securities Act of 1933 
D)  Securities Investor Protection Act of 1970 
E)  Maloney Act of 1938 
A)  Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 
B)  Sarbanes-Oxley Act of 2002 
C)  Securities Act of 1933 
D)  Securities Investor Protection Act of 1970 
E)  Maloney Act of 1938

Question 18

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

Accepted Answer

A) True 
 B)False

Question 19

A diversified portfolio of securities is characterized by:

Accepted Answer

A)  dissimilar risk-return characteristics of the financial instruments. 
B)  concentration on a single industry that has the highest growth rate. 
C)  erratic loss potential due to investment in the latest financial vehicles. 
D)  unstable earnings for the entire investment horizon. 
E)  investing in a single security that has the lowest risk and the highest returns. 
A)  dissimilar risk-return characteristics of the financial instruments. 
B)  concentration on a single industry that has the highest growth rate. 
C)  erratic loss potential due to investment in the latest financial vehicles. 
D)  unstable earnings for the entire investment horizon. 
E)  investing in a single security that has the lowest risk and the highest returns.

Question 20

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. 
[ Speculating | Investing ] is considered to be a long-term activity.

Accepted Answer

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

_____ is a process to settle disputes between a brokerage firm and its clients.

A potential investor in a new issue must be given a(n):

Diversification of investment securities increases risk.

An _____ provides financial and descriptive information about a firm's operations in the recent past to stockholders and other interested parties.

Online trading is the only valuable investment service available through the Internet.

Which of the following is a difference between an exchange-traded fund (ETF) and a mutual fund?

Stockbrokers are also known as:

Which of the following statements about exchange-traded notes (ETNs) is true?

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. Day trading is [ illegal | unethical ].

The _____ is often used as a benchmark in assessing the price behavior of high-tech stocks.

Two investment prerequisites that are essential to developing a successful investment program are:

Which of the following statements regarding broker markets is true?

Brokers prefer active traders to buy-and-hold investors.

Online trading is financially safer than trading with a human broker.

The _____ contains the so-called Volcker Rule, which prohibits depository banks from proprietary trading.

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

A diversified portfolio of securities is characterized by:

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. [ Speculating | Investing ] is considered to be a long-term activity.

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

_____ is a process to settle disputes between a brokerage firm and its clients.

A potential investor in a new issue must be given a(n):

Diversification of investment securities increases risk.

An _____ provides financial and descriptive information about a firm's operations in the recent past to stockholders and other interested parties.

Online trading is the only valuable investment service available through the Internet.

Which of the following is a difference between an exchange-traded fund (ETF) and a mutual fund?

Stockbrokers are also known as:

Which of the following statements about exchange-traded notes (ETNs) is true?

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. Day trading is [ illegal | unethical ].

The _____ is often used as a benchmark in assessing the price behavior of high-tech stocks.

Two investment prerequisites that are essential to developing a successful investment program are:

Which of the following statements regarding broker markets is true?

Brokers prefer active traders to buy-and-hold investors.

Online trading is financially safer than trading with a human broker.

The _____ contains the so-called Volcker Rule, which prohibits depository banks from proprietary trading.

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

A diversified portfolio of securities is characterized by:

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. [ Speculating | Investing ] is considered to be a long-term activity.

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