Question 1

More stock certificates are registered in the names of individual investors than in street names (i.e. ,brokerage firms).

Accepted Answer

A) True 
 B)False

Question 2

All of the following are basic categories of financial assets except

Accepted Answer

A)  Money market securities. 
B)  Stocks (equity). 
C)  Deeds (titles). 
D)  Bonds (debt). 
E)  All of the above represent financial assets. 
A)  Money market securities. 
B)  Stocks (equity). 
C)  Deeds (titles). 
D)  Bonds (debt). 
E)  All of the above represent financial assets.

Question 3

When an investor short sells a stock,which entails borrowing a stock from another investor and selling it in the market with the promise to replace the stock at some later date,the investor who owns the stock that is borrowed must be informed that his or her stock is being used for a short sale.

Accepted Answer

A) True 
 B)False

Question 4

The proportion of funds invested in various categories of assets,such as money market instruments,long-term debt,stocks,and real estate is referred to as

Accepted Answer

A)  Investment portfolio summation. 
B)  Asset allocation. 
C)  Risk tolerance level. 
D)  Expected return. 
E)  None of the above. 
A)  Investment portfolio summation. 
B)  Asset allocation. 
C)  Risk tolerance level. 
D)  Expected return. 
E)  None of the above.

Question 5

The ____ index measures the aggregate return for the 30 largest industrial firms in the United States.

Accepted Answer

A)  S&P 500 
B)  Dow Jones Industrial 
C)  NYSE composite 
D)  AMEX 
E)  NASDAQ small cap 
A)  S&P 500 
B)  Dow Jones Industrial 
C)  NYSE composite 
D)  AMEX 
E)  NASDAQ small cap

Question 6

Investors are individuals who try to make a quick profit based on short-term market adjustments.

Accepted Answer

A) True 
 B)False

Question 7

A bond with an annual coupon rate of 12 percent and face value of $1,000.00 was purchased for $990.00 and sold two years later for $1,050.00.What was the holding period return?

Accepted Answer

A)  15.1% 
B)  18.2% 
C)  30.3% 
D)  28.5% 
E)  30.0% 
A)  15.1% 
B)  18.2% 
C)  30.3% 
D)  28.5% 
E)  30.0%

Question 8

Organizations that help investors trade securities created by corporations and the government are called

Accepted Answer

A)  Financial intermediaries. 
B)  Brokerage firms. 
C)  Federal Reserve Boards. 
D)  Banks. 
E)  None of the above. 
A)  Financial intermediaries. 
B)  Brokerage firms. 
C)  Federal Reserve Boards. 
D)  Banks. 
E)  None of the above.

Question 9

Use the following information to compute the geometric arithmetic average return for Topwater Boats for 2007 through 2012.

Accepted Answer

A)  28.0% 
B)  17.2% 
C)  20.6% 
D)  16.3% 
E)  None of the above. 
A)  28.0% 
B)  17.2% 
C)  20.6% 
D)  16.3% 
E)  None of the above.

Question 10

The expected return on a portfolio is

Accepted Answer

A)  the sum of the square root of the expected returns on the individual stocks included in the portfolio times the beta of the individual stocks. 
B)  the simple arithmetic average of the expected returns on the individual stocks included in the portfolio. 
C)  the geometric average of the expected returns on the individual stocks included in the portfolio. 
D)  the weighted average of the expected returns on the individual stocks included in the portfolio. 
A)  the sum of the square root of the expected returns on the individual stocks included in the portfolio times the beta of the individual stocks. 
B)  the simple arithmetic average of the expected returns on the individual stocks included in the portfolio. 
C)  the geometric average of the expected returns on the individual stocks included in the portfolio. 
D)  the weighted average of the expected returns on the individual stocks included in the portfolio.

Question 11

-Refer to Portfolio.What was the two-year holding period return for the portfolio? Assume any dividend payments are included in the market value shown above.

Accepted Answer

A)  38.5% 
B)  27.8% 
C)  35.8% 
D)  30.7% 
E)  None of the above. 
A)  38.5% 
B)  27.8% 
C)  35.8% 
D)  30.7% 
E)  None of the above.

Question 12

The simple arithmetic average return differs from the geometric average return in that the geometric average takes into consideration compounding,or reinvestment,while the arithmetic average does not.

Accepted Answer

A) True 
 B)False

Question 13

Use the following information to compute the simple arithmetic average return for Topwater Boats for the period from 2007 through 2012?

Accepted Answer

A)  28.0% 
B)  17.2% 
C)  20.6% 
D)  16.3% 
E)  None of the above. 
A)  28.0% 
B)  17.2% 
C)  20.6% 
D)  16.3% 
E)  None of the above.

Question 14

When the financial markets become more unstable and unpredictable than normal,many professional investment managers shift their asset allocations from ____ to ____.

Accepted Answer

A)  stocks;short-term debt 
B)  bonds;stocks 
C)  stocks;derivatives 
D)  bonds;derivatives 
A)  stocks;short-term debt 
B)  bonds;stocks 
C)  stocks;derivatives 
D)  bonds;derivatives

Question 15

To trade securities an individual must be licensed by the exchanges on which the traded securities are listed.

Accepted Answer

A) True 
 B)False

Question 16

Individuals who try to make a quick profit based on short-term market adjustments are referred to as

Accepted Answer

A)  Speculators. 
B)  Investors. 
C)  Brokers. 
D)  Analysts. 
E)  None of the above. 
A)  Speculators. 
B)  Investors. 
C)  Brokers. 
D)  Analysts. 
E)  None of the above.

Question 17

The return on an investment is generated by any income produced by the investment and any change in the value,or the price,of the investment.

Accepted Answer

A) True 
 B)False

Question 18

The simple arithmetic average return and the geometric average return will be equal only if the annual returns are increasing over time.

Accepted Answer

A) True 
 B)False

Question 19

People who view investments as instruments that produce growth over a long period of time are referred to as

Accepted Answer

A)  Speculators. 
B)  Investors. 
C)  Brokers. 
D)  Analysts. 
E)  None of the above. 
A)  Speculators. 
B)  Investors. 
C)  Brokers. 
D)  Analysts. 
E)  None of the above.

Question 20

The primary reason people invest is to supplement current income.

Accepted Answer

A) True 
 B)False

More stock certificates are registered in the names of individual investors than in street names (i.e. ,brokerage firms).

All of the following are basic categories of financial assets except

When an investor short sells a stock,which entails borrowing a stock from another investor and selling it in the market with the promise to replace the stock at some later date,the investor who owns the stock that is borrowed must be informed that his or her stock is being used for a short sale.

The proportion of funds invested in various categories of assets,such as money market instruments,long-term debt,stocks,and real estate is referred to as

The ____ index measures the aggregate return for the 30 largest industrial firms in the United States.

Investors are individuals who try to make a quick profit based on short-term market adjustments.

A bond with an annual coupon rate of 12 percent and face value of $1,000.00 was purchased for $990.00 and sold two years later for $1,050.00.What was the holding period return?

Organizations that help investors trade securities created by corporations and the government are called

Use the following information to compute the geometric arithmetic average return for Topwater Boats for 2007 through 2012.

The expected return on a portfolio is

-Refer to Portfolio.What was the two-year holding period return for the portfolio? Assume any dividend payments are included in the market value shown above.

The simple arithmetic average return differs from the geometric average return in that the geometric average takes into consideration compounding,or reinvestment,while the arithmetic average does not.

Use the following information to compute the simple arithmetic average return for Topwater Boats for the period from 2007 through 2012?

When the financial markets become more unstable and unpredictable than normal,many professional investment managers shift their asset allocations from to .

To trade securities an individual must be licensed by the exchanges on which the traded securities are listed.

Individuals who try to make a quick profit based on short-term market adjustments are referred to as

The return on an investment is generated by any income produced by the investment and any change in the value,or the price,of the investment.

The simple arithmetic average return and the geometric average return will be equal only if the annual returns are increasing over time.

People who view investments as instruments that produce growth over a long period of time are referred to as

The primary reason people invest is to supplement current income.

An Overview of Finance

Financial Assets Instruments

Financial Markets and the Investment Banking Process

Financial Intermediaries and the Banking System

The Cost of Money Interest Rates

Business Organizations and the Tax Environment

Analysis of Financial Statements

Financial Planning and Control

Time Value of Money

Valuation Concepts

Risk and Rates of Return

The Cost of Capital

Capital Budgeting

Capital Structure and Dividend Policy Decisions

Working Capital Management

Investment Analysis and Valuation Techniques

Filters

Exam 16: Investment and Securities

More stock certificates are registered in the names of individual investors than in street names (i.e. ,brokerage firms).

All of the following are basic categories of financial assets except

When an investor short sells a stock,which entails borrowing a stock from another investor and selling it in the market with the promise to replace the stock at some later date,the investor who owns the stock that is borrowed must be informed that his or her stock is being used for a short sale.

The proportion of funds invested in various categories of assets,such as money market instruments,long-term debt,stocks,and real estate is referred to as

The ____ index measures the aggregate return for the 30 largest industrial firms in the United States.

Investors are individuals who try to make a quick profit based on short-term market adjustments.

A bond with an annual coupon rate of 12 percent and face value of $1,000.00 was purchased for $990.00 and sold two years later for $1,050.00.What was the holding period return?

Organizations that help investors trade securities created by corporations and the government are called

Use the following information to compute the geometric arithmetic average return for Topwater Boats for 2007 through 2012.

The expected return on a portfolio is

-Refer to Portfolio.What was the two-year holding period return for the portfolio? Assume any dividend payments are included in the market value shown above.

The simple arithmetic average return differs from the geometric average return in that the geometric average takes into consideration compounding,or reinvestment,while the arithmetic average does not.

Use the following information to compute the simple arithmetic average return for Topwater Boats for the period from 2007 through 2012?

When the financial markets become more unstable and unpredictable than normal,many professional investment managers shift their asset allocations from ____ to ____.

To trade securities an individual must be licensed by the exchanges on which the traded securities are listed.

Individuals who try to make a quick profit based on short-term market adjustments are referred to as

The return on an investment is generated by any income produced by the investment and any change in the value,or the price,of the investment.

The simple arithmetic average return and the geometric average return will be equal only if the annual returns are increasing over time.

People who view investments as instruments that produce growth over a long period of time are referred to as

The primary reason people invest is to supplement current income.

An Overview of Finance

Financial Assets Instruments

Financial Markets and the Investment Banking Process

Financial Intermediaries and the Banking System

The Cost of Money Interest Rates

Business Organizations and the Tax Environment

Analysis of Financial Statements

Financial Planning and Control

Time Value of Money

Valuation Concepts

Risk and Rates of Return

The Cost of Capital

Capital Budgeting

Capital Structure and Dividend Policy Decisions

Working Capital Management

Investment Analysis and Valuation Techniques

Filters

When the financial markets become more unstable and unpredictable than normal,many professional investment managers shift their asset allocations from to .