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. -The maximum amount of money you could lose in a short sale is [known | unknown] at the time of the transaction.

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 convertible bond would let the investor exchange it for [preferred | common] 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. -Exchange traded funds face the risk of [market fluctuations | default].

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. -If a brokerage agreement contains a binding arbitration clause,you [can | cannot] go to court to appeal your malpractice case against the broker.

A collection of investments is called

A statement specifying how investment capital will be invested in order to reach targeted goals is called a marketing plan.

Buying on margin allows you to purchase securities using 100 percent borrowed funds.

In investment terminology,selling stock that you have borrowed is known as a

The term "investment' refers to money placed in some medium where value and level of return are totally unpredictable.

Securities markets include

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. -Asset allocation is another term for [selecting the stocks you want to buy | dividing your portfolio among different types of securities].

The most widely followed measure of stock market performance is the New York Stock Exchange Index.

The SIPC provides protection to the investor from

The SEC requires corporations to issue ____ describing the firm and the security issue it wishes to sell.

During a bull market

____ is a portfolio characteristic which leads to reduced risk with good return.

Mutual funds often sell directly to investors.

Newly issued securities are sold to the public in the secondary market.

Which of the following is a true statement about the Dow Jones Industrial Average?

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(n)[underwriting | prospectus] is a document made available to prospective security buyers that describes the firm and a new security issue.