Exam 4: Investment Planning

What type of financial investment is guaranteed by a commercial bank?

Beta used to determine risk is only accurate when calculated for what?

Futures contracts are settled daily and traders are required to realize losses in cash on a daily basis, but to purchase futures contract requires what type of account?

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

What is the process of selecting broad investment categories for a client's portfolio?

A callable bond__________

What allows a corporation to have a debt instrument in its capital structure and are subordinate to other debt issued by the corporation?

The setting of specific percentages for each asset class demonstrates what type of investment strategy?

Your client wants a hands-on approach to portfolio management since they have the tendency to anticipate the direction of economic conditions. What type of investment strategy does this client want to practice?

What type of bonds are often issued to finance a takeover and merger or to help a start-up firm raise capital?

What improves when more participants are engaged in trading a security?

Behind the random walk model, the current price is the best prediction of future prices.

A shareholder owns 100 shares and there are three positions on the board of directors. How many votes does this shareholder have and what is the proper term for this voting right?

What would have to be completed to compare the benefits of a project to the cost of a project?

Volatility is the amount by which the price of a security swings up and down. If the price of a security moves up and down frequently, it has_____ volatility. Fill in the blank with the most suitable word.

Your client want to invest 80 percent of their funds in stocks that are steady and not effected by the economy and to invest another 20 percent of their funds in stock that would take advantage of economical shifts. Where type of stocks would you suggest 80 percent of the funds purchase?

Your client's investment stocks are not paying cash dividends but he wants to know how much the value of her stocks is. You inform her that there is a way to determine the value without cash dividends; what would you use to determine the stock value?

What measure for investment returns computes the return for each period and takes the average of the results?

Not all investments are capitalized for earnings, what one/s is/are?

Tom is looking at the morning's currency reports and notices that 1 Nigindia rupee equals 1.5 Vietbodian pounds. It also reads that 1 Vietbodian pound equals 2 Mexicali pesos, but 1 Nigindia rupee equals 4 Mexicali pesos. Tom wants to gain profits by employing an arbitrage strategy. Which of the following defines arbitrage strategy?