Question 1

As a young college graduate,your biggest investment ally is

Accepted Answer

A) leverage. 
B) a windfall. 
C) tax-free investments. 
D) time. 
E) derivatives. 
A) leverage. 
B) a windfall. 
C) tax-free investments. 
D) time. 
E) derivatives.

Question 2

An option gives its owner the right to buy or sell an asset.This asset is generally

Accepted Answer

A) preferred stock. 
B) mutual funds. 
C) corporate bonds. 
D) common stock. 
E) None of the above are correct. 
A) preferred stock. 
B) mutual funds. 
C) corporate bonds. 
D) common stock. 
E) None of the above are correct.

Question 3

If you are speculating that the price of a stocks will go down,your best course of action is to buy

Accepted Answer

A) call option. 
B) stock. 
C) put option. 
D) real estate. 
A) call option. 
B) stock. 
C) put option. 
D) real estate.

Question 4

Your emergency fund should always be invested in illiquid assets.

Accepted Answer

A) True 
 B)False

Question 5

The nominal rate of return is simply the real rate of return minus the inflation rate.

Accepted Answer

A) True 
 B)False

Question 6

ABC Corporation is selling additional shares of common stock.These are new shares of stock,and have never been sold or traded previously.The selling of these shares would take place in the ________ market.

Accepted Answer

A) primary 
B) secondary 
C) tertiary 
D) quaternary 
E) none of the above 
A) primary 
B) secondary 
C) tertiary 
D) quaternary 
E) none of the above

Question 7

In addition to your own investment,you borrowed money from your broker to purchase shares of a stock.Your broker called to tell you that the price of your stock has fallen and you now need to contribute more of your own money to keep the account at the minimum level.This is termed a(n)

Accepted Answer

A) account validation. 
B) margin call. 
C) minimum validation. 
D) stop-loss order. 
E) none of the above. 
A) account validation. 
B) margin call. 
C) minimum validation. 
D) stop-loss order. 
E) none of the above.

Question 8

You purchase shares of XYZ company at the beginning of the year for $20 per share.After receiving dividends of $2 per share,you sell the stock for $24 per share at the end of the year.What is your rate of return of the stock for the year?

Accepted Answer

A) 20% 
B) 10% 
C) 30% 
D) -10% 
A) 20% 
B) 10% 
C) 30% 
D) -10%

Question 9

Lawrence Wright is slow in math.He has before him the equation of (ending value minus beginning value)and income return totalled,then divided by beginning value.This is used to find the

Accepted Answer

A) rate of inflation. 
B) capital gain. 
C) capital loss 
D) rate of return. 
E) serialized rate of return. 
A) rate of inflation. 
B) capital gain. 
C) capital loss 
D) rate of return. 
E) serialized rate of return.

Question 10

What personal characteristics should you look for in a full-service broker and why are they important?

Accepted Answer

1.a reputation for integrity,intelligenc

Question 11

Day trading has been called

Accepted Answer

A) "a trading method for transferring wealth from unsophisticated investors to sophisticated investors." 
B) "a trading method for transferring wealth from sophisticated investors to unsophisticated investors." 
C) "the safest,most conservative trading method." 
D) "the long-term investors' preferred trading method." 
A) "a trading method for transferring wealth from unsophisticated investors to sophisticated investors." 
B) "a trading method for transferring wealth from sophisticated investors to unsophisticated investors." 
C) "the safest,most conservative trading method." 
D) "the long-term investors' preferred trading method."

Question 12

A round lot order is an order of how many shares?

Accepted Answer

A) 10 
B) 50 
C) 100 
D) 1,000 
A) 10 
B) 50 
C) 100 
D) 1,000

Question 13

During times of rising inflation,investments with fixed returns like a bond or bank CD are attractive investments to own.

Accepted Answer

A) True 
 B)False

Question 14

Alice learned that the difference between the real rate of return and the nominal or quoted rate of return is that

Accepted Answer

A) the real rate is adjusted for inflation. 
B) the real rate is not adjusted for inflation. 
C) the nominal rate is adjusted for inflation. 
D) none of the above. 
A) the real rate is adjusted for inflation. 
B) the real rate is not adjusted for inflation. 
C) the nominal rate is adjusted for inflation. 
D) none of the above.

Question 15

The nominal rate of interest that investors demand will increase with an increase in the expected rate of inflation.

Accepted Answer

A) True 
 B)False

Question 16

Explain the bid and ask price system when trading in stocks.

Accepted Answer

The OTC market is a network of broker de

Question 17

Jordan short sells 500 shares of Facebook at $200.Her broker has a 50% margin requirement.Facebook does not pay a dividend and commissions and other charges total $50.What dollar amount of collateral must she have in her account?

Accepted Answer

A) $50,000 
B) $10,000 
C) $100,000 
D) $25,000 
A) $50,000 
B) $10,000 
C) $100,000 
D) $25,000

Question 18

You recently purchased a stock for $50.It is now worth $75,and it paid a $15 in dividends during the two years you held it.What is your annualized rate of return on this stock?

Accepted Answer

A) 80% 
B) 40% 
C) 27% 
D) 25% 
A) 80% 
B) 40% 
C) 27% 
D) 25%

Question 19

Generally,day trading should be avoided.If you decide to participate in day trading,what should you keep in mind?

Accepted Answer

Be prepared to suffer severe financial l

Question 20

A GTC order remains effective until filled or cancelled.

Accepted Answer

A) True 
 B)False

As a young college graduate,your biggest investment ally is

An option gives its owner the right to buy or sell an asset.This asset is generally

If you are speculating that the price of a stocks will go down,your best course of action is to buy

Your emergency fund should always be invested in illiquid assets.

The nominal rate of return is simply the real rate of return minus the inflation rate.

ABC Corporation is selling additional shares of common stock.These are new shares of stock,and have never been sold or traded previously.The selling of these shares would take place in the ________ market.

In addition to your own investment,you borrowed money from your broker to purchase shares of a stock.Your broker called to tell you that the price of your stock has fallen and you now need to contribute more of your own money to keep the account at the minimum level.This is termed a(n)

You purchase shares of XYZ company at the beginning of the year for $20 per share.After receiving dividends of $2 per share,you sell the stock for $24 per share at the end of the year.What is your rate of return of the stock for the year?

Lawrence Wright is slow in math.He has before him the equation of (ending value minus beginning value)and income return totalled,then divided by beginning value.This is used to find the

What personal characteristics should you look for in a full-service broker and why are they important?

Day trading has been called

A round lot order is an order of how many shares?

During times of rising inflation,investments with fixed returns like a bond or bank CD are attractive investments to own.

Alice learned that the difference between the real rate of return and the nominal or quoted rate of return is that

The nominal rate of interest that investors demand will increase with an increase in the expected rate of inflation.

Explain the bid and ask price system when trading in stocks.

Jordan short sells 500 shares of Facebook at $200.Her broker has a 50% margin requirement.Facebook does not pay a dividend and commissions and other charges total $50.What dollar amount of collateral must she have in her account?

You recently purchased a stock for $50.It is now worth $75,and it paid a $15 in dividends during the two years you held it.What is your annualized rate of return on this stock?

Generally,day trading should be avoided.If you decide to participate in day trading,what should you keep in mind?

A GTC order remains effective until filled or cancelled.

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

As a young college graduate,your biggest investment ally is

An option gives its owner the right to buy or sell an asset.This asset is generally

If you are speculating that the price of a stocks will go down,your best course of action is to buy

Your emergency fund should always be invested in illiquid assets.

The nominal rate of return is simply the real rate of return minus the inflation rate.

ABC Corporation is selling additional shares of common stock.These are new shares of stock,and have never been sold or traded previously.The selling of these shares would take place in the ________ market.

In addition to your own investment,you borrowed money from your broker to purchase shares of a stock.Your broker called to tell you that the price of your stock has fallen and you now need to contribute more of your own money to keep the account at the minimum level.This is termed a(n)

You purchase shares of XYZ company at the beginning of the year for $20 per share.After receiving dividends of $2 per share,you sell the stock for $24 per share at the end of the year.What is your rate of return of the stock for the year?

Lawrence Wright is slow in math.He has before him the equation of (ending value minus beginning value)and income return totalled,then divided by beginning value.This is used to find the

What personal characteristics should you look for in a full-service broker and why are they important?

Day trading has been called

A round lot order is an order of how many shares?

During times of rising inflation,investments with fixed returns like a bond or bank CD are attractive investments to own.

Alice learned that the difference between the real rate of return and the nominal or quoted rate of return is that

The nominal rate of interest that investors demand will increase with an increase in the expected rate of inflation.

Explain the bid and ask price system when trading in stocks.

Jordan short sells 500 shares of Facebook at $200.Her broker has a 50% margin requirement.Facebook does not pay a dividend and commissions and other charges total $50.What dollar amount of collateral must she have in her account?

You recently purchased a stock for $50.It is now worth $75,and it paid a $15 in dividends during the two years you held it.What is your annualized rate of return on this stock?

Generally,day trading should be avoided.If you decide to participate in day trading,what should you keep in mind?

A GTC order remains effective until filled or cancelled.

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