Question 1

The law that gave the SEC the power to regulate trading on all national security exchanges was the

Accepted Answer

A)  Maloney Act of 1938. 
B)  Securities Exchange Act of 1934. 
C)  Securities Act of 1933. 
D)  Investment Company Act of 1940. 
E)  Federal Securities Act of 1964. 
A)  Maloney Act of 1938. 
B)  Securities Exchange Act of 1934. 
C)  Securities Act of 1933. 
D)  Investment Company Act of 1940. 
E)  Federal Securities Act of 1964.

Question 2

Which of the following would most likely be considered the safest investment?

Accepted Answer

A)  Corporate bond 
B)  Certificate of deposit 
C)  Common stock 
D)  Cumulative preferred stock 
E)  Preferred stock 
A)  Corporate bond 
B)  Certificate of deposit 
C)  Common stock 
D)  Cumulative preferred stock 
E)  Preferred stock

Question 3

Many investors like mutual funds because they provide instant

Accepted Answer

A)  diversification. 
B)  profitability. 
C)  financial returns. 
D)  access. 
E)  fee reductions. 
A)  diversification. 
B)  profitability. 
C)  financial returns. 
D)  access. 
E)  fee reductions.

Question 4

What are the most conservative of all investments?

Accepted Answer

A)  Mattresses 
B)  Bank accounts 
C)  Common stocks 
D)  Corporate bonds 
E)  Mutual funds 
A)  Mattresses 
B)  Bank accounts 
C)  Common stocks 
D)  Corporate bonds 
E)  Mutual funds

Question 5

A corporate bond with a face value of $1,000 quoted at 100 is selling for

Accepted Answer

A)  $1. 
B)  $10. 
C)  $1,000. 
D)  $10,000. 
E)  $100. 
A)  $1. 
B)  $10. 
C)  $1,000. 
D)  $10,000. 
E)  $100.

Question 6

Why might one investor choose to invest in no-load funds while another may choose load funds? What are the advantages and disadvantages of each? Is there a significant difference between investment returns?

Accepted Answer

One investor may choose to invest in no-

Question 7

Since 1926, U.S. government bonds have returned an average of about ___ percent a year.

Accepted Answer

A)  14 
B)  12 
C)  9 
D)  6 
E)  3 
A)  14 
B)  12 
C)  9 
D)  6 
E)  3

Question 8

What does an investor have to do when he or she receives a margin call?

Accepted Answer

A)  Return all of the stock purchased with the borrowed funds. 
B)  Give the brokerage firm all of the shares of stock purchased using the margin requirement. 
C)  Return the borrowed funds in full along with fees and interest. 
D)  Provide additional cash or securities as collateral for the borrowed money. 
E)  Exchange the borrowed stock for one with greater growth potential. 
A)  Return all of the stock purchased with the borrowed funds. 
B)  Give the brokerage firm all of the shares of stock purchased using the margin requirement. 
C)  Return the borrowed funds in full along with fees and interest. 
D)  Provide additional cash or securities as collateral for the borrowed money. 
E)  Exchange the borrowed stock for one with greater growth potential.

Question 9

Kelso Corporation declared a 10 percent stock dividend. John, one of the stockholders, has 100 shares. How many shares will John own after the stock dividend?

Accepted Answer

A)  110 
B)  10 
C)  1 
D)  1,100 
E)  90 
A)  110 
B)  10 
C)  1 
D)  1,100 
E)  90

Question 10

Which of the following is not a characteristic of common stock?

Accepted Answer

A)  Shares can be sold for a capital gain if the price of the stock increases. 
B)  The firm has no legal obligation to pay dividends to stockholders. 
C)  An increase or decrease in the market value of the stock will have a corresponding effect on the value of the investment. 
D)  Each share of stock represents debt for the corporation. 
E)  Cash dividends are generally paid on a quarterly basis. 
A)  Shares can be sold for a capital gain if the price of the stock increases. 
B)  The firm has no legal obligation to pay dividends to stockholders. 
C)  An increase or decrease in the market value of the stock will have a corresponding effect on the value of the investment. 
D)  Each share of stock represents debt for the corporation. 
E)  Cash dividends are generally paid on a quarterly basis.

Question 11

What are the three ways that individuals can make money by buying common stock?

Accepted Answer

A)  Through an increase in the value of the stock, dividend payments, and stock splits. 
B)  Through stock splits, stock exchanges, and cash dividends. 
C)  Through dividends, increasing stock value, and conversion to bonds. 
D)  Through stock splits, stock buys, and dividends. 
E)  Through stock price appreciation, stock conversions, and stock dividends. 
A)  Through an increase in the value of the stock, dividend payments, and stock splits. 
B)  Through stock splits, stock exchanges, and cash dividends. 
C)  Through dividends, increasing stock value, and conversion to bonds. 
D)  Through stock splits, stock buys, and dividends. 
E)  Through stock price appreciation, stock conversions, and stock dividends.

Question 12

Which of the following statements is false?

Accepted Answer

A)  Generally, online transactions are less expensive when compared with the costs of trading securities through a full-service brokerage firm. 
B)  Full-service brokerage firms charge 3 to 5 percent of the transaction amount. 
C)  Commissions for trading bonds are usually lower than those for trading stocks. 
D)  With the exception of most mutual funds, the investor generally pays a commission when buying and selling securities. 
E)  Most brokerage firms have a minimum commission for trading securities. 
A)  Generally, online transactions are less expensive when compared with the costs of trading securities through a full-service brokerage firm. 
B)  Full-service brokerage firms charge 3 to 5 percent of the transaction amount. 
C)  Commissions for trading bonds are usually lower than those for trading stocks. 
D)  With the exception of most mutual funds, the investor generally pays a commission when buying and selling securities. 
E)  Most brokerage firms have a minimum commission for trading securities.

The law that gave the SEC the power to regulate trading on all national security exchanges was the

Which of the following would most likely be considered the safest investment?

Many investors like mutual funds because they provide instant

What are the most conservative of all investments?

A corporate bond with a face value of $1,000 quoted at 100 is selling for

Why might one investor choose to invest in no-load funds while another may choose load funds? What are the advantages and disadvantages of each? Is there a significant difference between investment returns?

Since 1926, U.S. government bonds have returned an average of about ___ percent a year.

What does an investor have to do when he or she receives a margin call?

Kelso Corporation declared a 10 percent stock dividend. John, one of the stockholders, has 100 shares. How many shares will John own after the stock dividend?

Which of the following is not a characteristic of common stock?

What are the three ways that individuals can make money by buying common stock?

Which of the following statements is false?

Exploring the World of Business and Economics

A: Being Ethical and Socially Responsible

B: Being Ethical and Socially Responsible

A: Exploring Global Business

B: Exploring Global Business

Choosing a Form of Business Ownership

Small Business, Entrepreneurship, and Franchises

Understanding the Management Process

Creating a Flexible Organization

Producing Quality Goods and Services

Attracting and Retaining the Best Employees

Motivating and Satisfying Employees and Teams

Enhancing Union-Management Relations

Building Customer Relationships Through Effective Marketing

A: Creating and Pricing Products That Satisfy Customers

B: Creating and Pricing Products That Satisfy Customers

Wholesaling, Retailing, and Physical Distribution

Developing Integrated Marketing Communications

Social Media, E-Business, and Accounting

Using Management and Accounting Information

Understanding Money, Banking, and Credit

Mastering Financial Management

B: Understanding Personal Finances and Investments

Filters

Exam 20: A: Understanding Personal Finances and Investments

The law that gave the SEC the power to regulate trading on all national security exchanges was the

Which of the following would most likely be considered the safest investment?

Many investors like mutual funds because they provide instant

What are the most conservative of all investments?

A corporate bond with a face value of $1,000 quoted at 100 is selling for

Why might one investor choose to invest in no-load funds while another may choose load funds? What are the advantages and disadvantages of each? Is there a significant difference between investment returns?

Since 1926, U.S. government bonds have returned an average of about ___ percent a year.

What does an investor have to do when he or she receives a margin call?

Kelso Corporation declared a 10 percent stock dividend. John, one of the stockholders, has 100 shares. How many shares will John own after the stock dividend?

Which of the following is not a characteristic of common stock?

What are the three ways that individuals can make money by buying common stock?

Which of the following statements is false?

Exploring the World of Business and Economics

A: Being Ethical and Socially Responsible

B: Being Ethical and Socially Responsible

A: Exploring Global Business

B: Exploring Global Business

Choosing a Form of Business Ownership

Small Business, Entrepreneurship, and Franchises

Understanding the Management Process

Creating a Flexible Organization

Producing Quality Goods and Services

Attracting and Retaining the Best Employees

Motivating and Satisfying Employees and Teams

Enhancing Union-Management Relations

Building Customer Relationships Through Effective Marketing

A: Creating and Pricing Products That Satisfy Customers

B: Creating and Pricing Products That Satisfy Customers

Wholesaling, Retailing, and Physical Distribution

Developing Integrated Marketing Communications

Social Media, E-Business, and Accounting

Using Management and Accounting Information

Understanding Money, Banking, and Credit

Mastering Financial Management

B: Understanding Personal Finances and Investments

Filters