Question 1

__________ have no maturity date. ​

Accepted Answer

A) Common stocks 
B) Bonds 
C) Corporate deposits 
D) Insurance policies 
A) Common stocks 
B) Bonds 
C) Corporate deposits 
D) Insurance policies

Question 2

Which of the following is true of bonds?

Accepted Answer

A) Bonds are liabilities of the issuer. 
B) Individuals investing in bonds receive dividends. 
C) Bonds cannot be purchased or sold prior to maturity. 
D) Income from bonds varies every year. 
E) The principal invested in bonds is not returned at the time of maturity. 
A) Bonds are liabilities of the issuer. 
B) Individuals investing in bonds receive dividends. 
C) Bonds cannot be purchased or sold prior to maturity. 
D) Income from bonds varies every year. 
E) The principal invested in bonds is not returned at the time of maturity.

Question 3

Which of the following is a characteristic of a stop-loss order?

Accepted Answer

A) The stop-loss order is the quickest way to have an order filled. 
B) The stop-loss order allows buy orders to be filled at the lowest price. 
C) The stop-loss order allows stocks to be purchased at the current market price. 
D) The stop-loss order sells a stock when market price drops below a specified price. 
E) The stop-loss order is used to buy stocks at a 10 percent margin. 
A) The stop-loss order is the quickest way to have an order filled. 
B) The stop-loss order allows buy orders to be filled at the lowest price. 
C) The stop-loss order allows stocks to be purchased at the current market price. 
D) The stop-loss order sells a stock when market price drops below a specified price. 
E) The stop-loss order is used to buy stocks at a 10 percent margin.

Question 4

A bear market condition is associated with:

Accepted Answer

A) investor optimism. 
B) declining securities prices. 
C) economic recovery. 
D) increased tax rate. 
E) high returns. 
A) investor optimism. 
B) declining securities prices. 
C) economic recovery. 
D) increased tax rate. 
E) high returns.

Question 5

A diversified portfolio of securities is characterized by:

Accepted Answer

A) dissimilar risk-return characteristics of the financial instruments. 
B) concentration on a single industry which has the highest growth rate. 
C) erratic loss potential due to investment in latest financial vehicles. 
D) unstable earnings for the entire investment horizon. 
E) investing on a single security which has the lowest risk and the highest returns. 
A) dissimilar risk-return characteristics of the financial instruments. 
B) concentration on a single industry which has the highest growth rate. 
C) erratic loss potential due to investment in latest financial vehicles. 
D) unstable earnings for the entire investment horizon. 
E) investing on a single security which has the lowest risk and the highest returns.

Question 6

A convertible bond would let the investor exchange it for __________. ​

Accepted Answer

A) common stock 
B) preferred stock 
C) mutual fund 
D) exchange traded fund 
A) common stock 
B) preferred stock 
C) mutual fund 
D) exchange traded fund

Question 7

_____ is a process of choosing securities in order to create a portfolio that provides an acceptable level of return and an acceptable exposure to risk.

Accepted Answer

A) Capitalization 
B) Risk disposition 
C) Diversification 
D) Stratification 
E) Risk ramification 
A) Capitalization 
B) Risk disposition 
C) Diversification 
D) Stratification 
E) Risk ramification

Question 8

Financial ratios of a company are included in its annual stockholders' report.

Accepted Answer

A) True 
 B)False

Question 9

The new securities sold in primary markets are handled by a(n):

Accepted Answer

A) security exchange council. 
B) dealer. 
C) investment banker. 
D) credit bureau. 
E) insurance agent. 
A) security exchange council. 
B) dealer. 
C) investment banker. 
D) credit bureau. 
E) insurance agent.

Question 10

The over-the-counter market is an organized securities exchange.

Accepted Answer

A) True 
 B)False

Question 11

Instructing your broker to buy or sell a stock at a particular price is a:

Accepted Answer

A) limit order. 
B) market order. 
C) margin order. 
D) regular order. 
E) stop order. 
A) limit order. 
B) market order. 
C) margin order. 
D) regular order. 
E) stop order.

Question 12

Once an asset allocation plan is developed and securities are selected,these decisions do not have to be made again.

Accepted Answer

A) True 
 B)False

Question 13

Which of the following best describes portfolio management?

Accepted Answer

A) The management of a marketplace in which stocks,bonds,and other financial instruments are traded 
B) A procedure used to settle disputes between a brokerage firm and its clients,which makes a final and usually binding decision on the matter 
C) The management of an agency of the federal government that regulates the disclosure of information about securities and generally oversees the operation of the securities exchanges and markets 
D) The process of creation of a document that is made available to prospective security buyers that describes the firm and a new security issue 
E) The buying,selling,and holding of various securities in order to meet a set of predetermined investment needs and objectives 
A) The management of a marketplace in which stocks,bonds,and other financial instruments are traded 
B) A procedure used to settle disputes between a brokerage firm and its clients,which makes a final and usually binding decision on the matter 
C) The management of an agency of the federal government that regulates the disclosure of information about securities and generally oversees the operation of the securities exchanges and markets 
D) The process of creation of a document that is made available to prospective security buyers that describes the firm and a new security issue 
E) The buying,selling,and holding of various securities in order to meet a set of predetermined investment needs and objectives

Question 14

There is a trade-off between earning a high current income from an investment and obtaining significant capital appreciation from it.

Accepted Answer

A) True 
 B)False

Question 15

When you buy 300 shares of a company,you have purchased:

Accepted Answer

A) an odd lot. 
B) a round lot. 
C) a combined lot. 
D) an even lot. 
E) a prime lot. 
A) an odd lot. 
B) a round lot. 
C) a combined lot. 
D) an even lot. 
E) a prime lot.

Question 16

A collection of investments assembled to meet a common investment goal is called:

Accepted Answer

A) a treasury. 
B) a diversification. 
C) a grouping. 
D) an envelope. 
E) a portfolio. 
A) a treasury. 
B) a diversification. 
C) a grouping. 
D) an envelope. 
E) a portfolio.

Question 17

__________ involves dividing a portfolio among different classes of securities in order to preserve the capital by protecting the portfolio against negative market developments. ​

Accepted Answer

A) Arbitration 
B) Asset allocation 
C) Portfolio tracking 
D) Estate planning 
A) Arbitration 
B) Asset allocation 
C) Portfolio tracking 
D) Estate planning

Question 18

Discount brokers will:

Accepted Answer

A) execute orders at the best possible price. 
B) give commission to the investment bankers. 
C) issue prospectus of the new issue in the primary market. 
D) provide finance to underwrite the shares issued for the first time. 
E) maintain a minimum balance of unsold shares of loss-making corporations. 
A) execute orders at the best possible price. 
B) give commission to the investment bankers. 
C) issue prospectus of the new issue in the primary market. 
D) provide finance to underwrite the shares issued for the first time. 
E) maintain a minimum balance of unsold shares of loss-making corporations.

Question 19

A bull market is characterized by:

Accepted Answer

A) investor optimism. 
B) low returns. 
C) economic slowdown. 
D) falling stock prices. 
E) investor pessimism. 
A) investor optimism. 
B) low returns. 
C) economic slowdown. 
D) falling stock prices. 
E) investor pessimism.

Question 20

When completed,an investment plan is a way of translating an abstract investment target into a specific investment program.

Accepted Answer

A) True 
 B)False

__________ have no maturity date.

Which of the following is true of bonds?

Which of the following is a characteristic of a stop-loss order?

A bear market condition is associated with:

A diversified portfolio of securities is characterized by:

A convertible bond would let the investor exchange it for __________.

_____ is a process of choosing securities in order to create a portfolio that provides an acceptable level of return and an acceptable exposure to risk.

Financial ratios of a company are included in its annual stockholders' report.

The new securities sold in primary markets are handled by a(n):

The over-the-counter market is an organized securities exchange.

Instructing your broker to buy or sell a stock at a particular price is a:

Once an asset allocation plan is developed and securities are selected,these decisions do not have to be made again.

Which of the following best describes portfolio management?

There is a trade-off between earning a high current income from an investment and obtaining significant capital appreciation from it.

When you buy 300 shares of a company,you have purchased:

A collection of investments assembled to meet a common investment goal is called:

__________ involves dividing a portfolio among different classes of securities in order to preserve the capital by protecting the portfolio against negative market developments.

Discount brokers will:

A bull market is characterized by:

When completed,an investment plan is a way of translating an abstract investment target into a specific investment program.

Understanding the Financial Planning Process

Using Financial Statements and Budgets

Preparing Your Taxes

Managing Your Cash and Savings

Making Automobile and Housing Decisions

Using Credit

Using Consumer Loans

Insuring Your Life

Insuring Your Health

Protecting Your Property

Investing in Stocks and Bonds

Investing in Mutual Funds, ETFS and Real Estate

Planning for Retirement

Preserving Your Estate

Filters

Exam 11: Investment Planning

__________ have no maturity date. ​

Which of the following is true of bonds?

Which of the following is a characteristic of a stop-loss order?

A bear market condition is associated with:

A diversified portfolio of securities is characterized by:

A convertible bond would let the investor exchange it for __________. ​

_____ is a process of choosing securities in order to create a portfolio that provides an acceptable level of return and an acceptable exposure to risk.

Financial ratios of a company are included in its annual stockholders' report.

The new securities sold in primary markets are handled by a(n):

The over-the-counter market is an organized securities exchange.

Instructing your broker to buy or sell a stock at a particular price is a:

Once an asset allocation plan is developed and securities are selected,these decisions do not have to be made again.

Which of the following best describes portfolio management?

There is a trade-off between earning a high current income from an investment and obtaining significant capital appreciation from it.

When you buy 300 shares of a company,you have purchased:

A collection of investments assembled to meet a common investment goal is called:

__________ involves dividing a portfolio among different classes of securities in order to preserve the capital by protecting the portfolio against negative market developments. ​

Discount brokers will:

A bull market is characterized by:

When completed,an investment plan is a way of translating an abstract investment target into a specific investment program.

Understanding the Financial Planning Process

Using Financial Statements and Budgets

Preparing Your Taxes

Managing Your Cash and Savings

Making Automobile and Housing Decisions

Using Credit

Using Consumer Loans

Insuring Your Life

Insuring Your Health

Protecting Your Property

Investing in Stocks and Bonds

Investing in Mutual Funds, ETFS and Real Estate

Planning for Retirement

Preserving Your Estate

Filters

__________ have no maturity date.

A convertible bond would let the investor exchange it for __________.

__________ involves dividing a portfolio among different classes of securities in order to preserve the capital by protecting the portfolio against negative market developments.