Exam 4: Investment Planning

What are the two methods for computing the basis of mutual funds?

The U.S. Government's Series E bond was replaced by what bond?

Which of the following is considered a distribution of a corporation's net income?

What type of stocks keep up with inflation or the general economy?

What model should you have a working knowledge of in order to best measure the risk and return of a portfolio allocation?

What measurement does not include any reinvestment income or price appreciation or depreciation?

Systematic risk includes risks that affect the entire market; the risk cannot be eliminated through diversification because it affects the entire market. For an investor to determine total financial risk, what must also be determined?

Interest rates have an inverse relationship with what type of investments?

How many asset classes are there in financial planning?

Your client wants to purchase stock that appears to have a higher price than it should. What information should you seek to determine if indeed the price is too high?

What concept has the shortcoming of assuming all cash flows are discounted at the same rate and are reinvested at the yield to maturity rate?

When are convertibles in double jeopardy?

What term is defined as the variability or uncertainly in a firm's operating income or earnings before interest and taxes?

What type of investment vehicle has low-default-risk and specializes in short-term securities?

A client is an owner of a semi-large firm in Kansas, but they want to retain their dollars for use later to pay for goods purchased from other U.S. firms. The client has decided to take some funds and invest in Barclays Bank in London. What would the client's funds be known as once the investment is made?

Your client wants to invest in bonds and they don't mind high levels of risk if the payoff is worth it in the end. He has been watching a company that is looking to complete a major project in the city and is offering debentures, but there are rumors that the company may go bankrupt trying to complete the project. What should the client be told about debentures as it pertains to the current scenario?

Your client wants to know which of his bonds are more volatile to changes in interest rates; what is the best technique to determine volatility of bonds?

Some bonds are debt obligations issued by state and local governments, others are sold with no coupon at a discount, still others are promissory notes; what type of bond are issued to purchase specific fixed assets that are pledged to secure debt?

You have invested $10,000 of your client's money in the exchange market of Spain. You have introduced your client's money to what?

Which of the following term(s) refer to the principal amount of the bond that the issuing corporation will pay the bondholders on the bond's maturity date?