Exam 11: Investment Planning

Assume that the price of ABC common stock fell in a short period of time from $105 to $84.Which of the following investors probably made the most money?

The ____ is not an organized security exchange.

Choose the word or phrase in [ ] which will correctly complete the statement. Select A for the first item, B for the second item, and C if neither item will correctly complete the statement. -An investment offering a stable current income would likely be more desirable for [a young couple | a retired couple].

Choose the word or phrase in [ ] which will correctly complete the statement. Select A for the first item, B for the second item, and C if neither item will correctly complete the statement. -The collection of investments you select to meet your investment goals is called your [portfolio | allocation].

Once one's asset allocation plan is developed and securities are selected,these decisions do not have to be made again until there is a major life change.

Choose the word or phrase in [ ] which will correctly complete the statement. Select A for the first item, B for the second item, and C if neither item will correctly complete the statement. -Listed securities would be purchased from [a securities exchange | the over-the-counter market].

Monte wants to save for his daughter's college education.He would like to have $85,000 in 15 years.If Monte can earn an average of 8.5% on this fund,how much would he need to deposit in the account today to meet his goal? If Monte has no money to set aside now but wants to save at the end of each month for this goal,how much would he need to add to the account each month?

A round lot consists of multiples of 100 shares of stock.

Choose the word or phrase in [ ] which will correctly complete the statement. Select A for the first item, B for the second item, and C if neither item will correctly complete the statement. -The majority of the securities laws were enacted [before | after] 1930.

A retired couple can probably bear more risk in their portfolio than a young investor with a secure job.

Choose the word or phrase in [ ] which will correctly complete the statement. Select A for the first item, B for the second item, and C if neither item will correctly complete the statement. -Short-term securities are traded in the [money | capital] market.

Choose the word or phrase in [ ] which will correctly complete the statement. Select A for the first item, B for the second item, and C if neither item will correctly complete the statement. -A fixed dividend would be received with [common | preferred] stock.

Minimum margin requirements that brokers must observe are set by the

Which of the following is least likely to be an investment objective?

Portfolio rebalancing refers to buying and selling activities intended to return a portfolio to its target allocation levels.

Which of the following is not a securities market?

Choose the word or phrase in [ ] which will correctly complete the statement. Select A for the first item, B for the second item, and C if neither item will correctly complete the statement. -In general,brokerage fees on a round lot of common stock will amount to about [1%| 10%] of the transaction value.

Brokers charge a commission on security purchases as well as on security sales.

The total return of a portfolio is influenced far more by specific security selection than asset allocation.

The margin requirement for common stock is 50%.