Question 1

Call risk is the risk to bondholders that a bond may be called away from them before maturity.

Accepted Answer

A) True 
 B)False

Question 2

A primary market is a market in which new,as opposed to previously issued,securities are traded.

Accepted Answer

A) True 
 B)False

Question 3

A day trader is an individual who trades with a very long-term investment horizon.

Accepted Answer

A) True 
 B)False

Question 4

A(n)________ account represents the money over which you give a broker power to trade for you.

Accepted Answer

A) discretionary 
B) discount 
C) stock purchasing 
D) securities 
E) indemnity 
A) discretionary 
B) discount 
C) stock purchasing 
D) securities 
E) indemnity

Question 5

An investor with a low propensity for risk would avoid investments with high risk premiums.

Accepted Answer

A) True 
 B)False

Question 6

Just as valuable as the tax break on capital gains income is the fact that you don't have to claim it-and,therefore,you don't pay taxes on the asset until you

Accepted Answer

A) have an equal match in personal income. 
B) sell it. 
C) retire. 
D) file your next years' taxes. 
A) have an equal match in personal income. 
B) sell it. 
C) retire. 
D) file your next years' taxes.

Question 7

Most of the bonds that are bought and sold are not transacted on the organized exchanges.They are bought and sold through bond dealers who do not sell many ________ bonds but do trade many ________ bonds in the secondary market.

Accepted Answer

A) corporate;government 
B) high par value;corporate 
C) government;low par value 
D) corporate;firm-specific bonds 
A) corporate;government 
B) high par value;corporate 
C) government;low par value 
D) corporate;firm-specific bonds

Question 8

Bonds are always a safe investment if held to maturity.

Accepted Answer

A) True 
 B)False

Question 9

Securities that are less frequently traded,along with many new and high-tech stocks,are relegated to the

Accepted Answer

A) NYSE. 
B) AMEX. 
C) ADR market. 
D) OTC market. 
A) NYSE. 
B) AMEX. 
C) ADR market. 
D) OTC market.

Question 10

According to the Love & Money section,what percent of Americans fully recover financially from divorce?

Accepted Answer

A) 50% 
B) 25% 
C) 33% 
D) 75% 
A) 50% 
B) 25% 
C) 33% 
D) 75%

Question 11

Why should a younger investor,saving for the long term,have most of their money in common stocks?

Accepted Answer

A) Over time,common stocks generate the largest average returns. 
B) Investors with lots of time ahead of them have the opportunity to recover from a serious investment set-back. 
C) They require the least amount of knowledge,research and expense. 
D) All of the above are correct. 
E) Only A and B are correct. 
A) Over time,common stocks generate the largest average returns. 
B) Investors with lots of time ahead of them have the opportunity to recover from a serious investment set-back. 
C) They require the least amount of knowledge,research and expense. 
D) All of the above are correct. 
E) Only A and B are correct.

Question 12

You want to buy stock in a dynamic electronics firm.You place an order that cannot be completely filled the first day,so you ask for a(n)

Accepted Answer

A) second chance. 
B) market order. 
C) open order. 
D) day order. 
E) extended order. 
A) second chance. 
B) market order. 
C) open order. 
D) day order. 
E) extended order.

Question 13

Systematic risk can be effectively managed through diversification.

Accepted Answer

A) True 
 B)False

Question 14

The collateral an investor must put up when conducting a short sale is known as a margin requirement.

Accepted Answer

A) True 
 B)False

Question 15

Why do investors sometimes demand risk premiums when investing?

Accepted Answer

The typical investor is risk averse whic

Question 16

A ________ is an order that specifies a securities trade is to be made only at a certain price or better.

Accepted Answer

A) day order 
B) market order 
C) limit order 
D) GTC order 
E) none of the above 
A) day order 
B) market order 
C) limit order 
D) GTC order 
E) none of the above

Question 17

Real estate investments are more liquid than stocks most of the time.

Accepted Answer

A) True 
 B)False

Question 18

Reggie believed that the price of a stock was going to drop in the near future,so his strategy was to short sell that stock to make a profit.

Accepted Answer

A) True 
 B)False

Question 19

If the nominal rate is 10% and inflation is 3%,the real rate of return is 7%.

Accepted Answer

A) True 
 B)False

Question 20

Assume you have a margin account with a 50% initial margin.You purchase 100 shares of stock at $80 per share.The price increases to $100 per share.What is the net value of your investment (margin)now?

Accepted Answer

A) $10,000 
B) $8,000 
C) $6,000 
D) $5,000 
E) $2,000 
A) $10,000 
B) $8,000 
C) $6,000 
D) $5,000 
E) $2,000

Call risk is the risk to bondholders that a bond may be called away from them before maturity.

A primary market is a market in which new,as opposed to previously issued,securities are traded.

A day trader is an individual who trades with a very long-term investment horizon.

A(n)________ account represents the money over which you give a broker power to trade for you.

An investor with a low propensity for risk would avoid investments with high risk premiums.

Just as valuable as the tax break on capital gains income is the fact that you don't have to claim it-and,therefore,you don't pay taxes on the asset until you

Most of the bonds that are bought and sold are not transacted on the organized exchanges.They are bought and sold through bond dealers who do not sell many bonds but do trade many bonds in the secondary market.

Bonds are always a safe investment if held to maturity.

Securities that are less frequently traded,along with many new and high-tech stocks,are relegated to the

According to the Love & Money section,what percent of Americans fully recover financially from divorce?

Why should a younger investor,saving for the long term,have most of their money in common stocks?

You want to buy stock in a dynamic electronics firm.You place an order that cannot be completely filled the first day,so you ask for a(n)

Systematic risk can be effectively managed through diversification.

The collateral an investor must put up when conducting a short sale is known as a margin requirement.

Why do investors sometimes demand risk premiums when investing?

A ________ is an order that specifies a securities trade is to be made only at a certain price or better.

Real estate investments are more liquid than stocks most of the time.

Reggie believed that the price of a stock was going to drop in the near future,so his strategy was to short sell that stock to make a profit.

If the nominal rate is 10% and inflation is 3%,the real rate of return is 7%.

Assume you have a margin account with a 50% initial margin.You purchase 100 shares of stock at $80 per share.The price increases to $100 per share.What is the net value of your investment (margin)now?

The Financial Planning Process

Measuring Your Financial Health and Making a Plan

Understanding and Appreciating the Time Value of Money

Tax Planning and Strategies

Cash or Liquid Asset Management

Using Credit Cards: the Role of Open Credit

Student and Consumer Loans: the Role of Planned Borrowing

The Home and Automobile Decision

Life and Health Insurance

Property and Liability Insurance

Investing in Stocks

Investing in Bonds and Other Alternatives

Mutual Funds: an Easy Way to Diversify

Retirement Planning

Estate Planning: Saving Your Heirs Money and Headaches

Financial Life Eventsfitting the Pieces Together

Filters

Exam 11: Investment Basics

Call risk is the risk to bondholders that a bond may be called away from them before maturity.

A primary market is a market in which new,as opposed to previously issued,securities are traded.

A day trader is an individual who trades with a very long-term investment horizon.

A(n)________ account represents the money over which you give a broker power to trade for you.

An investor with a low propensity for risk would avoid investments with high risk premiums.

Just as valuable as the tax break on capital gains income is the fact that you don't have to claim it-and,therefore,you don't pay taxes on the asset until you

Most of the bonds that are bought and sold are not transacted on the organized exchanges.They are bought and sold through bond dealers who do not sell many ________ bonds but do trade many ________ bonds in the secondary market.

Bonds are always a safe investment if held to maturity.

Securities that are less frequently traded,along with many new and high-tech stocks,are relegated to the

According to the Love & Money section,what percent of Americans fully recover financially from divorce?

Why should a younger investor,saving for the long term,have most of their money in common stocks?

You want to buy stock in a dynamic electronics firm.You place an order that cannot be completely filled the first day,so you ask for a(n)

Systematic risk can be effectively managed through diversification.

The collateral an investor must put up when conducting a short sale is known as a margin requirement.

Why do investors sometimes demand risk premiums when investing?

A ________ is an order that specifies a securities trade is to be made only at a certain price or better.

Real estate investments are more liquid than stocks most of the time.

Reggie believed that the price of a stock was going to drop in the near future,so his strategy was to short sell that stock to make a profit.

If the nominal rate is 10% and inflation is 3%,the real rate of return is 7%.

Assume you have a margin account with a 50% initial margin.You purchase 100 shares of stock at $80 per share.The price increases to $100 per share.What is the net value of your investment (margin)now?

The Financial Planning Process

Measuring Your Financial Health and Making a Plan

Understanding and Appreciating the Time Value of Money

Tax Planning and Strategies

Cash or Liquid Asset Management

Using Credit Cards: the Role of Open Credit

Student and Consumer Loans: the Role of Planned Borrowing

The Home and Automobile Decision

Life and Health Insurance

Property and Liability Insurance

Investing in Stocks

Investing in Bonds and Other Alternatives

Mutual Funds: an Easy Way to Diversify

Retirement Planning

Estate Planning: Saving Your Heirs Money and Headaches

Financial Life Eventsfitting the Pieces Together

Filters

Most of the bonds that are bought and sold are not transacted on the organized exchanges.They are bought and sold through bond dealers who do not sell many bonds but do trade many bonds in the secondary market.