Exam 11: Investment Planning

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. -Day trading is [illegal | risky].

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. -[Investing | Speculating] is viewed as a short-term activity that involves the buying and selling of securities in which future value and expected return are highly uncertain.

A systematic investment routine involves investing similar sums in regular intervals.

A diversified portfolio is less risky than putting your money into a single security.

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 owner of a bond would expect to receive [steady | variable] annual income.

Exchange-traded notes (ETNs)face both market risk and the risk of the issuing bank defaulting.

The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 is designed to improve accountability and transparency in the U.S.financial system.

An unmarried investor with few responsibilities should be able to accept ____ better than two people who are married with young children.

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 order to buy or sell a security at the best price available at the time the order is received is a [market | limit] order.

Investment vehicles include

The bid price is the price paid by an investor for a 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 [primary | secondary] market is where new securities are sold to the public.

The first step in asset allocation is selecting the specific securities that should go into your portfolio.

Instructing your broker to buy a stock at a specified or lower price is a

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. -Margin requirements are set by the [SEC | Federal Reserve].

____ is a short-term investment activity.

You are covered through the SIPC for losses you incur due to the inept advice you receive from a brokerage firm.

Diversification increases risk.

The Securities Investor Protection Corporation insurance guarantees the dollar value of your securities will not dip below a certain level.

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