Question 1

The bonds that are issued to finance schools,transportation,and airports are called

Accepted Answer

A)  government bonds. 
B)  public bonds. 
C)  private bonds. 
D)  municipal bonds. 
E)  debentures. 
A)  government bonds. 
B)  public bonds. 
C)  private bonds. 
D)  municipal bonds. 
E)  debentures.

Question 2

On January 3,2012 the price of gold was $1625 per ounce and futures gold contracts for July 2013 were selling for $1575 per ounce.Suppose that you purchased a 100-ounce gold futures contract in January 2012 for $157 500 ($1575 × 100).If in March 2013 the July gold futures sold for $1700,you could sell your contract for a profit of $12 500.

Accepted Answer

A) True 
 B)False

Question 3

A cumulative preferred stock with a $100 par value and 6% dividend is currently trading on the market at $110 per share.What is the amount of the dividend the holder is entitled to receive each year?

Accepted Answer

A)  $66 
B)  6% of the company's net profit 
C)  $6% of the total book value of preferred shares 
D)  $6 
E)  $0 
A)  $66 
B)  6% of the company's net profit 
C)  $6% of the total book value of preferred shares 
D)  $6 
E)  $0

Question 4

What is an advantage of purchasing common stock?

Accepted Answer

A)  Stocks with high interest rates are desirable for individuals living on a fixed income. 
B)  Common stock pays out interest at regular intervals. 
C)  Common stock has first claim on dividends ahead of preferred stock. 
D)  Common stock offers high growth potential for investors. 
E)  Common stock is less risky than bonds. 
A)  Stocks with high interest rates are desirable for individuals living on a fixed income. 
B)  Common stock pays out interest at regular intervals. 
C)  Common stock has first claim on dividends ahead of preferred stock. 
D)  Common stock offers high growth potential for investors. 
E)  Common stock is less risky than bonds.

Question 5

Scott just called his broker to place an order to buy 100 shares of IBM if the price is less than or equal to $120.Which of the terms below describe his order?

Accepted Answer

A)  Both a round lot and a limit buy order 
B)  Limit buy order 
C)  Round lot 
D)  Odd lot 
E)  Stop order 
A)  Both a round lot and a limit buy order 
B)  Limit buy order 
C)  Round lot 
D)  Odd lot 
E)  Stop order

Question 6

Canadian securities regulations

Accepted Answer

A)  are generally seen as representing a good model that other industrialized countries should follow. 
B)  are characterized by a comprehensive federal securities legislation and a federal regulatory body. 
C)  apply only to the sale of new issues of stock. 
D)  have led to timely corrective action being taken when securities violations are alleged. 
E)  none of these are correct. 
A)  are generally seen as representing a good model that other industrialized countries should follow. 
B)  are characterized by a comprehensive federal securities legislation and a federal regulatory body. 
C)  apply only to the sale of new issues of stock. 
D)  have led to timely corrective action being taken when securities violations are alleged. 
E)  none of these are correct.

Question 7

A mutual fund pools investments from individuals and firms to purchase a portfolio of stocks,bonds,and short-term securities.

Accepted Answer

A) True 
 B)False

Question 8

________ involves the large purchase or sale of a group of stocks,often triggered by computerized trading programs that can be launched without human supervision or control.

Accepted Answer

A)  Program trading 
B)  Auto-buy 
C)  Automated quotations 
D)  Computer quotes 
E)  Robotics 
A)  Program trading 
B)  Auto-buy 
C)  Automated quotations 
D)  Computer quotes 
E)  Robotics

Question 9

Mega Computer's financial statements show 1000 shares of common stock with a par value of $10 000,retained earnings of $20 000,additional paid in capital of $10 000,and long-term debt of $30 000.What is the market value of a share of Mega's stock?

Accepted Answer

A)  $70.00 
B)  $20.00 
C)  $40.00 
D)  $30.00 
E)  It is not possible to tell from the information given. 
A)  $70.00 
B)  $20.00 
C)  $40.00 
D)  $30.00 
E)  It is not possible to tell from the information given.

Question 10

The world's first electronic stock market is known as

Accepted Answer

A)  the TSE. 
B)  the IMF. 
C)  AMEX. 
D)  NASDAQ. 
E)  the NYSE. 
A)  the TSE. 
B)  the IMF. 
C)  AMEX. 
D)  NASDAQ. 
E)  the NYSE.

Question 11

What kind of bond gives the issuer the right to redeem the bond at almost any time?

Accepted Answer

A)  Municipal bonds 
B)  Registered bonds 
C)  Convertible bonds 
D)  Promissory bonds 
E)  Callable bonds 
A)  Municipal bonds 
B)  Registered bonds 
C)  Convertible bonds 
D)  Promissory bonds 
E)  Callable bonds

Question 12

The market value of a bond depends on its stated interest rate,the going rate of interest,and its maturity date.

Accepted Answer

A) True 
 B)False

Question 13

Blue-sky laws apply mainly to the

Accepted Answer

A)  operation of local brokerage firms. 
B)  sale of new securities. 
C)  purchase of shares by insiders. 
D)  sale of securities on the secondary market. 
E)  issuance of unsecured bonds. 
A)  operation of local brokerage firms. 
B)  sale of new securities. 
C)  purchase of shares by insiders. 
D)  sale of securities on the secondary market. 
E)  issuance of unsecured bonds.

Question 14

Why would an investor wish to purchase a blue-chip stock?

Accepted Answer

Blue-chip stocks are issued by

Question 15

Issuers reduce the risk to bondholders by pledging certain assets in the event of default.These bonds are

Accepted Answer

A)  callable. 
B)  secured. 
C)  registered. 
D)  bearer. 
E)  debenture. 
A)  callable. 
B)  secured. 
C)  registered. 
D)  bearer. 
E)  debenture.

Question 16

When a bond sells at a premium,

Accepted Answer

A)  its selling price is below its redemption price. 
B)  its selling price is above its redemption price. 
C)  its price is getting into the range that is too high for most people. 
D)  its redemption price equals its face value. 
E)  its selling price equals its redemption price. 
A)  its selling price is below its redemption price. 
B)  its selling price is above its redemption price. 
C)  its price is getting into the range that is too high for most people. 
D)  its redemption price equals its face value. 
E)  its selling price equals its redemption price.

Question 17

Which of the following business firms serve as financial specialists in issuing new securities?

Accepted Answer

A)  Speculators 
B)  Venture capitalists 
C)  Financial managers 
D)  Institutional investors 
E)  Investment bankers 
A)  Speculators 
B)  Venture capitalists 
C)  Financial managers 
D)  Institutional investors 
E)  Investment bankers

Question 18

Mega Computer's financial statements show 1000 shares of common stock with a par value of $10 000,retained earnings of $20 000,additional paid in capital of $10 000,and long-term debt of $30 000.What is the book value of a share of Mega's stock?

Accepted Answer

A)  $70.00 
B)  $20.00 
C)  $40.00 
D)  $30.00 
E)  $50.00 
A)  $70.00 
B)  $20.00 
C)  $40.00 
D)  $30.00 
E)  $50.00

Question 19

A ________ can pay the holder in stock instead of cash.

Accepted Answer

A)  derivative 
B)  common share 
C)  callable bond 
D)  convertible bond 
E)  preferred share 
A)  derivative 
B)  common share 
C)  callable bond 
D)  convertible bond 
E)  preferred share

Question 20

Which of the following statements is correct with respect to bonds?

Accepted Answer

A)  Nearly all secondary trading of bonds occurs in the over-the-counter market. 
B)  Over the years,bonds have become steadily less important as a source of long-term funds for corporations. 
C)  From an investor's perspective,debentures are generally a better investment than bearer bonds. 
D)  When an investor hears that a bond has a sinking fund,that is a sign that the company is in financial trouble. 
E)  All of these statements are correct. 
A)  Nearly all secondary trading of bonds occurs in the over-the-counter market. 
B)  Over the years,bonds have become steadily less important as a source of long-term funds for corporations. 
C)  From an investor's perspective,debentures are generally a better investment than bearer bonds. 
D)  When an investor hears that a bond has a sinking fund,that is a sign that the company is in financial trouble. 
E)  All of these statements are correct.

The bonds that are issued to finance schools,transportation,and airports are called

A cumulative preferred stock with a $100 par value and 6% dividend is currently trading on the market at $110 per share.What is the amount of the dividend the holder is entitled to receive each year?

What is an advantage of purchasing common stock?

Scott just called his broker to place an order to buy 100 shares of IBM if the price is less than or equal to $120.Which of the terms below describe his order?

Canadian securities regulations

A mutual fund pools investments from individuals and firms to purchase a portfolio of stocks,bonds,and short-term securities.

________ involves the large purchase or sale of a group of stocks,often triggered by computerized trading programs that can be launched without human supervision or control.

Mega Computer's financial statements show 1000 shares of common stock with a par value of $10 000,retained earnings of $20 000,additional paid in capital of $10 000,and long-term debt of $30 000.What is the market value of a share of Mega's stock?

The world's first electronic stock market is known as

What kind of bond gives the issuer the right to redeem the bond at almost any time?

The market value of a bond depends on its stated interest rate,the going rate of interest,and its maturity date.

Blue-sky laws apply mainly to the

Why would an investor wish to purchase a blue-chip stock?

Issuers reduce the risk to bondholders by pledging certain assets in the event of default.These bonds are

When a bond sells at a premium,

Which of the following business firms serve as financial specialists in issuing new securities?

Mega Computer's financial statements show 1000 shares of common stock with a par value of $10 000,retained earnings of $20 000,additional paid in capital of $10 000,and long-term debt of $30 000.What is the book value of a share of Mega's stock?

A ________ can pay the holder in stock instead of cash.

Which of the following statements is correct with respect to bonds?

Understanding the Canadian Business System

Understanding the Environments of Business

Conducting Business Ethically and Responsibly

Understanding Entrepreneurship, small Business, and New Venture Creation

The Global Context of Business

Managing the Business Enterprise

Managing Human Resources

Understanding Labourmanagement Relations

Motivating and Leading Employees

Producing Goods and Services

Increasing Productivity and Quality

Managing Information Systems and Communication Technology

Understanding Accounting Issues

Understanding Marketing Processes and Consumer Behaviour

Developing and Promoting Goods and Services

Pricing and Distributing Goods and Services

Understanding Money and Banking

Financial Decisions and Risk Management

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Exam 19: Understanding Securities and Investments

The bonds that are issued to finance schools,transportation,and airports are called

A cumulative preferred stock with a $100 par value and 6% dividend is currently trading on the market at $110 per share.What is the amount of the dividend the holder is entitled to receive each year?

What is an advantage of purchasing common stock?

Scott just called his broker to place an order to buy 100 shares of IBM if the price is less than or equal to $120.Which of the terms below describe his order?

Canadian securities regulations

A mutual fund pools investments from individuals and firms to purchase a portfolio of stocks,bonds,and short-term securities.

________ involves the large purchase or sale of a group of stocks,often triggered by computerized trading programs that can be launched without human supervision or control.

Mega Computer's financial statements show 1000 shares of common stock with a par value of $10 000,retained earnings of $20 000,additional paid in capital of $10 000,and long-term debt of $30 000.What is the market value of a share of Mega's stock?

The world's first electronic stock market is known as

What kind of bond gives the issuer the right to redeem the bond at almost any time?

The market value of a bond depends on its stated interest rate,the going rate of interest,and its maturity date.

Blue-sky laws apply mainly to the

Why would an investor wish to purchase a blue-chip stock?

Issuers reduce the risk to bondholders by pledging certain assets in the event of default.These bonds are

When a bond sells at a premium,

Which of the following business firms serve as financial specialists in issuing new securities?

Mega Computer's financial statements show 1000 shares of common stock with a par value of $10 000,retained earnings of $20 000,additional paid in capital of $10 000,and long-term debt of $30 000.What is the book value of a share of Mega's stock?

A ________ can pay the holder in stock instead of cash.

Which of the following statements is correct with respect to bonds?

Understanding the Canadian Business System

Understanding the Environments of Business

Conducting Business Ethically and Responsibly

Understanding Entrepreneurship, small Business, and New Venture Creation

The Global Context of Business

Managing the Business Enterprise

Managing Human Resources

Understanding Labourmanagement Relations

Motivating and Leading Employees

Producing Goods and Services

Increasing Productivity and Quality

Managing Information Systems and Communication Technology

Understanding Accounting Issues

Understanding Marketing Processes and Consumer Behaviour

Developing and Promoting Goods and Services

Pricing and Distributing Goods and Services

Understanding Money and Banking

Financial Decisions and Risk Management

Filters