Question 1

What is the purpose of a circuit breaker for the market?

Accepted Answer

A)  It prevents the market from declining in value. 
B)  It prevents investors from losing money in the market. 
C)  It temporarily stops computerized trading to allow investors to analyze the extraordinary market swings. 
D)  All of the above are correct. 
E)  Only A and B are correct. 
A)  It prevents the market from declining in value. 
B)  It prevents investors from losing money in the market. 
C)  It temporarily stops computerized trading to allow investors to analyze the extraordinary market swings. 
D)  All of the above are correct. 
E)  Only A and B are correct.

Question 2

How do interest rates affect returns on other investments?

Accepted Answer

The expected returns on all investments

Question 3

The real rate of return is the nominal rate of return adjusted for inflation.

Accepted Answer

A) True 
 B)False

Question 4

Market risk deals with the inability to sell a security quickly at fair market value.

Accepted Answer

A) True 
 B)False

Question 5

When trading there are "round trip" costs in that you will pay costs when you buy securities and when you sell securities.

Accepted Answer

A) True 
 B)False

Question 6

Tran purchased a house for a rental property for $100,000 five years ago.During the time he owned this rental,his net rental income was a total of $4,000.He just sold the property for $120,000.What was his average annual return on this investment?

Accepted Answer

A)  4.0% 
B)  4.8% 
C)  20% 
D)  24% 
A)  4.0% 
B)  4.8% 
C)  20% 
D)  24%

Question 7

Differentiate between primary and secondary security markets.

Accepted Answer

A primary market is one in which newly i

Question 8

Full service brokers are legally obligated to analyze the recommendations they receive from analysts.

Accepted Answer

A) True 
 B)False

Question 9

Risk capacity refers to the strength of your financial safety net.

Accepted Answer

A) True 
 B)False

Question 10

Long term capital gains are taxed at ________ percent.

Accepted Answer

A)  8 
B)  10 
C)  15 
D)  25 
E)  40 
A)  8 
B)  10 
C)  15 
D)  25 
E)  40

Question 11

You purchased some stock last month for $50 per share.Today the stock closed at $80 per share.You would like to protect the profit that you have made on this stock but you really don't want to sell it in case it continues to rise in price.What should you do?

Accepted Answer

A)  Place a market order on this stock 
B)  Place a stop-loss order on this stock 
C)  Place a protect order on this stock 
D)  None of the above 
A)  Place a market order on this stock 
B)  Place a stop-loss order on this stock 
C)  Place a protect order on this stock 
D)  None of the above

Question 12

When placing a market order to purchase shares of stock,you will be required to make the order good-till-canceled.

Accepted Answer

A) True 
 B)False

Question 13

Our study of efficient markets tells us all of the following about investing except

Accepted Answer

A)  do not try to time the market - stay with your plan. 
B)  long-term investing is your best bet, not systems. 
C)  go with the best investment advisor money can buy. 
D)  focus on effective asset allocation. 
E)  diversify and seek help if you don't feel comfortable. 
A)  do not try to time the market - stay with your plan. 
B)  long-term investing is your best bet, not systems. 
C)  go with the best investment advisor money can buy. 
D)  focus on effective asset allocation. 
E)  diversify and seek help if you don't feel comfortable.

Question 14

Petrina was told by a successful friend to invest in stocks and income-producing real estate.Both of these are examples of ________ investments.

Accepted Answer

A)  ownership 
B)  lending 
C)  risk-free 
D)  short-term 
E)  liquid 
A)  ownership 
B)  lending 
C)  risk-free 
D)  short-term 
E)  liquid

Question 15

Bruce Lee owns stocks,bonds,real estate,gold coins,T-Bills,and gemstones.He has a(n)

Accepted Answer

A)  equity portfolio. 
B)  default-proof portfolio. 
C)  inflation-proof portfolio. 
D)  diverse portfolio. 
E)  risk adverse portfolio. 
A)  equity portfolio. 
B)  default-proof portfolio. 
C)  inflation-proof portfolio. 
D)  diverse portfolio. 
E)  risk adverse portfolio.

Question 16

A group of 100 shares of common stock is referred to as a(n)

Accepted Answer

A)  odd lot. 
B)  round lot. 
C)  even lot. 
D)  square lot. 
E)  none of the above. 
A)  odd lot. 
B)  round lot. 
C)  even lot. 
D)  square lot. 
E)  none of the above.

Question 17

What type of investment would have a high risk premium associated with political and regulatory risk?

Accepted Answer

A)  A drug company 
B)  A casino company 
C)  A tobacco company 
D)  All of the above are correct. 
A)  A drug company 
B)  A casino company 
C)  A tobacco company 
D)  All of the above are correct.

Question 18

If you earned a negative 5% return on your investments while the overall stock market was down 9% then you have outperformed the market.

Accepted Answer

A) True 
 B)False

Question 19

An option gives you the right to buy or sell the underlying asset at a set price on or before the option's maturity date.

Accepted Answer

A) True 
 B)False

Question 20

Compare and contrast lending and ownership investments.

Accepted Answer

You actually lend someone your money in

What is the purpose of a circuit breaker for the market?

How do interest rates affect returns on other investments?

The real rate of return is the nominal rate of return adjusted for inflation.

Market risk deals with the inability to sell a security quickly at fair market value.

When trading there are "round trip" costs in that you will pay costs when you buy securities and when you sell securities.

Tran purchased a house for a rental property for $100,000 five years ago.During the time he owned this rental,his net rental income was a total of $4,000.He just sold the property for $120,000.What was his average annual return on this investment?

Differentiate between primary and secondary security markets.

Full service brokers are legally obligated to analyze the recommendations they receive from analysts.

Risk capacity refers to the strength of your financial safety net.

Long term capital gains are taxed at ________ percent.

You purchased some stock last month for $50 per share.Today the stock closed at $80 per share.You would like to protect the profit that you have made on this stock but you really don't want to sell it in case it continues to rise in price.What should you do?

When placing a market order to purchase shares of stock,you will be required to make the order good-till-canceled.

Our study of efficient markets tells us all of the following about investing except

Petrina was told by a successful friend to invest in stocks and income-producing real estate.Both of these are examples of ________ investments.

Bruce Lee owns stocks,bonds,real estate,gold coins,T-Bills,and gemstones.He has a(n)

A group of 100 shares of common stock is referred to as a(n)

What type of investment would have a high risk premium associated with political and regulatory risk?

If you earned a negative 5% return on your investments while the overall stock market was down 9% then you have outperformed the market.

An option gives you the right to buy or sell the underlying asset at a set price on or before the option's maturity date.

Compare and contrast lending and ownership investments.

The Financial Planning Process

Measuring Your Financial Health and Making a Plan

Understanding and Appreciating the Time Value of Money

Tax Planning and Strategies

Cash or Liquid Asset Management

Using Credit Cards: The Role of Open Credit

Student and Consumer Loans: The Role of Planned Borrowing

The Home and Automobile Decision

Life and Health Insurance

Property and Liability Insurance

Investing in Stocks

Investing in Bonds and Other Alternatives

Mutual Funds: An Easy Way to Diversify

Retirement Planning

Estate Planning: Saving Your Heirs Money and Headaches

Financial Life Events Fitting the Pieces Together

Filters

Exam 11: Investment Basics

What is the purpose of a circuit breaker for the market?

How do interest rates affect returns on other investments?

The real rate of return is the nominal rate of return adjusted for inflation.

Market risk deals with the inability to sell a security quickly at fair market value.

When trading there are "round trip" costs in that you will pay costs when you buy securities and when you sell securities.

Tran purchased a house for a rental property for $100,000 five years ago.During the time he owned this rental,his net rental income was a total of $4,000.He just sold the property for $120,000.What was his average annual return on this investment?

Differentiate between primary and secondary security markets.

Full service brokers are legally obligated to analyze the recommendations they receive from analysts.

Risk capacity refers to the strength of your financial safety net.

Long term capital gains are taxed at ________ percent.

You purchased some stock last month for $50 per share.Today the stock closed at $80 per share.You would like to protect the profit that you have made on this stock but you really don't want to sell it in case it continues to rise in price.What should you do?

When placing a market order to purchase shares of stock,you will be required to make the order good-till-canceled.

Our study of efficient markets tells us all of the following about investing except

Petrina was told by a successful friend to invest in stocks and income-producing real estate.Both of these are examples of ________ investments.

Bruce Lee owns stocks,bonds,real estate,gold coins,T-Bills,and gemstones.He has a(n)

A group of 100 shares of common stock is referred to as a(n)

What type of investment would have a high risk premium associated with political and regulatory risk?

If you earned a negative 5% return on your investments while the overall stock market was down 9% then you have outperformed the market.

An option gives you the right to buy or sell the underlying asset at a set price on or before the option's maturity date.

Compare and contrast lending and ownership investments.

The Financial Planning Process

Measuring Your Financial Health and Making a Plan

Understanding and Appreciating the Time Value of Money

Tax Planning and Strategies

Cash or Liquid Asset Management

Using Credit Cards: The Role of Open Credit

Student and Consumer Loans: The Role of Planned Borrowing

The Home and Automobile Decision

Life and Health Insurance

Property and Liability Insurance

Investing in Stocks

Investing in Bonds and Other Alternatives

Mutual Funds: An Easy Way to Diversify

Retirement Planning

Estate Planning: Saving Your Heirs Money and Headaches

Financial Life Events Fitting the Pieces Together

Filters