Question 1

Preferred stock appreciates in value much faster than common stock.

Accepted Answer

A) True 
 B)False

Question 2

Robex Retail forms a contract with one of its suppliers to buy specific amounts of agricultural produce at a later date.This contract is an example of a(n)________.

Accepted Answer

A)  financial future 
B)  put option 
C)  credit derivative 
D)  call option 
E)  commodities future 
A)  financial future 
B)  put option 
C)  credit derivative 
D)  call option 
E)  commodities future

Question 3

Investing in bonds typically has higher risk than investing in stocks.

Accepted Answer

A) True 
 B)False

Question 4

The price at which the stock is actually selling is referred to as its ________ value.

Accepted Answer

A)  face 
B)  par 
C)  book 
D)  intrinsic 
E)  market 
A)  face 
B)  par 
C)  book 
D)  intrinsic 
E)  market

Question 5

The amount of money or principle that the purchaser of a bond lends to the bond issuer is known as its coupon.

Accepted Answer

A) True 
 B)False

Question 6

The maturity date is the date on which ________.

Accepted Answer

A)  interest will be paid every month to a bond's investors 
B)  interest will be paid every year to a bond's investors 
C)  a bond will be converted to a common stock 
D)  the principle of a bond will be repaid in full 
E)  an installment of interest will be paid to investors of bonds 
A)  interest will be paid every month to a bond's investors 
B)  interest will be paid every year to a bond's investors 
C)  a bond will be converted to a common stock 
D)  the principle of a bond will be repaid in full 
E)  an installment of interest will be paid to investors of bonds

Question 7

JSE Limited is a South African organization that facilitates exchange of equities between investors.JSE Limited is a(n)________.

Accepted Answer

A)  financial broker 
B)  fund manager 
C)  treasury 
D)  stock exchange 
E)  underwriter firm 
A)  financial broker 
B)  fund manager 
C)  treasury 
D)  stock exchange 
E)  underwriter firm

Question 8

You invest $6,000 in a no-load mutual fund whose net asset value per share is $36.How many shares of the mutual fund will you receive if the coupon is 8 percent?

Accepted Answer

A)  4.92 
B)  166.66 
C)  750 
D)  288 
E)  20.83 
A)  4.92 
B)  166.66 
C)  750 
D)  288 
E)  20.83

Question 9

With a zero-coupon bond,the ________.

Accepted Answer

A)  purchaser buys the bond at a discount from the face value 
B)  full face value is not paid to the investor at maturity 
C)  investor receives interest on a regular basis 
D)  interest is paid immediately after a bond is purchased 
E)  purchaser buys a bond by paying exactly the face value 
A)  purchaser buys the bond at a discount from the face value 
B)  full face value is not paid to the investor at maturity 
C)  investor receives interest on a regular basis 
D)  interest is paid immediately after a bond is purchased 
E)  purchaser buys a bond by paying exactly the face value

Question 10

Funds that invest in foreign and U.S.securities are called international funds.

Accepted Answer

A) True 
 B)False

Question 11

Balanced funds refer to funds that invest in a combination of stocks and bonds.

Accepted Answer

A) True 
 B)False

Question 12

During a bear market,most stocks increase in value.

Accepted Answer

A) True 
 B)False

Question 13

Treasury bonds are short-term debt securities issued by the federal government that are repaid within a year.

Accepted Answer

A) True 
 B)False

Question 14

Describe a bull market and a bear market.

Accepted Answer

A market situation in which mo

Question 15

Portfolio diversification is performed to ________.

Accepted Answer

A)  protect against significant declines in any one vehicle 
B)  maximize the returns from any one vehicle 
C)  reduce the load that intermediaries charge 
D)  maximize the earning potential of a portfolio 
E)  maximize the earning potential of an investment vehicle 
A)  protect against significant declines in any one vehicle 
B)  maximize the returns from any one vehicle 
C)  reduce the load that intermediaries charge 
D)  maximize the earning potential of a portfolio 
E)  maximize the earning potential of an investment vehicle

Question 16

Derivatives are contracts whose value is derived from some other entity.

Accepted Answer

A) True 
 B)False

Question 17

In your portfolio,you own 450 shares of General Electric.The company announces that each share of stock is being divided into three new shares,so you now own 1,350 shares.This is known as a stock ________.

Accepted Answer

A)  option 
B)  buyback 
C)  valuation 
D)  dilution 
E)  split 
A)  option 
B)  buyback 
C)  valuation 
D)  dilution 
E)  split

Question 18

________ refer to debt securities issued by the federal government that are repaid more than 10 years after issuance.

Accepted Answer

A)  Treasury bonds 
B)  TIPS 
C)  Treasury notes 
D)  Municipal bonds 
E)  Treasury bills 
A)  Treasury bonds 
B)  TIPS 
C)  Treasury notes 
D)  Municipal bonds 
E)  Treasury bills

Question 19

A stock exchange is an organization that buys and sells securities on behalf of individual and institutional investors.

Accepted Answer

A) True 
 B)False

Question 20

Stocks of major,well-established corporations with demonstrated ability to manage their way through every kind of economic condition are known as ________ stocks.

Accepted Answer

A)  blue chip 
B)  income 
C)  growth 
D)  penny 
E)  cyclical 
A)  blue chip 
B)  income 
C)  growth 
D)  penny 
E)  cyclical

Preferred stock appreciates in value much faster than common stock.

Robex Retail forms a contract with one of its suppliers to buy specific amounts of agricultural produce at a later date.This contract is an example of a(n)________.

Investing in bonds typically has higher risk than investing in stocks.

The price at which the stock is actually selling is referred to as its ________ value.

The amount of money or principle that the purchaser of a bond lends to the bond issuer is known as its coupon.

The maturity date is the date on which ________.

JSE Limited is a South African organization that facilitates exchange of equities between investors.JSE Limited is a(n)________.

You invest $6,000 in a no-load mutual fund whose net asset value per share is $36.How many shares of the mutual fund will you receive if the coupon is 8 percent?

With a zero-coupon bond,the ________.

Funds that invest in foreign and U.S.securities are called international funds.

Balanced funds refer to funds that invest in a combination of stocks and bonds.

During a bear market,most stocks increase in value.

Treasury bonds are short-term debt securities issued by the federal government that are repaid within a year.

Describe a bull market and a bear market.

Portfolio diversification is performed to ________.

Derivatives are contracts whose value is derived from some other entity.

In your portfolio,you own 450 shares of General Electric.The company announces that each share of stock is being divided into three new shares,so you now own 1,350 shares.This is known as a stock ________.

________ refer to debt securities issued by the federal government that are repaid more than 10 years after issuance.

A stock exchange is an organization that buys and sells securities on behalf of individual and institutional investors.

Stocks of major,well-established corporations with demonstrated ability to manage their way through every kind of economic condition are known as ________ stocks.

Developing a Business Mindset

Understanding Basic Economics

The Global Marketplace

Business Ethics and Corporate Social Responsibility

Forms of Ownership

Entrepreneurship and Small Business Ownership

Management Roles, Functions, and Skills

Organization and Teamwork

Production Systems

Employee Motivation

Human Resources Management

Labor Relations

The Art and Science of Marketing

Product and Pricing Strategies

Distribution and Marketing Logistics

Customer Communication

Financial Information and Accounting Concepts

Financial Management

The Money Supply and Banking Systems

Filters

Exam 19: Financial Markets and Investment Strategies

Preferred stock appreciates in value much faster than common stock.

Robex Retail forms a contract with one of its suppliers to buy specific amounts of agricultural produce at a later date.This contract is an example of a(n)________.

Investing in bonds typically has higher risk than investing in stocks.

The price at which the stock is actually selling is referred to as its ________ value.

The amount of money or principle that the purchaser of a bond lends to the bond issuer is known as its coupon.

The maturity date is the date on which ________.

JSE Limited is a South African organization that facilitates exchange of equities between investors.JSE Limited is a(n)________.

You invest $6,000 in a no-load mutual fund whose net asset value per share is $36.How many shares of the mutual fund will you receive if the coupon is 8 percent?

With a zero-coupon bond,the ________.

Funds that invest in foreign and U.S.securities are called international funds.

Balanced funds refer to funds that invest in a combination of stocks and bonds.

During a bear market,most stocks increase in value.

Treasury bonds are short-term debt securities issued by the federal government that are repaid within a year.

Describe a bull market and a bear market.

Portfolio diversification is performed to ________.

Derivatives are contracts whose value is derived from some other entity.

In your portfolio,you own 450 shares of General Electric.The company announces that each share of stock is being divided into three new shares,so you now own 1,350 shares.This is known as a stock ________.

________ refer to debt securities issued by the federal government that are repaid more than 10 years after issuance.

A stock exchange is an organization that buys and sells securities on behalf of individual and institutional investors.

Stocks of major,well-established corporations with demonstrated ability to manage their way through every kind of economic condition are known as ________ stocks.

Developing a Business Mindset

Understanding Basic Economics

The Global Marketplace

Business Ethics and Corporate Social Responsibility

Forms of Ownership

Entrepreneurship and Small Business Ownership

Management Roles, Functions, and Skills

Organization and Teamwork

Production Systems

Employee Motivation

Human Resources Management

Labor Relations

The Art and Science of Marketing

Product and Pricing Strategies

Distribution and Marketing Logistics

Customer Communication

Financial Information and Accounting Concepts

Financial Management

The Money Supply and Banking Systems

Filters