Question 1

Don has an agreement to purchase a specified amount of a commodity at a given price on a set future date.Don has a

Accepted Answer

A)  load mutual fund. 
B)  debenture. 
C)  callable bond. 
D)  futures contract. 
E)  no-load mutual fund. 
A)  load mutual fund. 
B)  debenture. 
C)  callable bond. 
D)  futures contract. 
E)  no-load mutual fund.

Question 2

Bondholders have a claim on a corporation's assets and earnings that comes before the claims of common and preferred shareholders.

Accepted Answer

A) True 
 B)False

Question 3

Les says that it is foolish to invest in the stock market because you can lose money.It is much better to simply put your money in a savings account where it is safe.Laura agrees that investing is risky,but says that even relatively low-risk investments will earn more than the low rate of interest that is paid in a savings account.Which of the following undermines Les's argument?

Accepted Answer

A)  The value of some companies' stocks have grown. 
B)  The stock market can experience a decline in its overall value. 
C)  The return on a savings account is not as high as the return on some stocks. 
D)  The interest rate earned in a savings account may be lower than the rate of inflation. 
E)  A minimum balance must be maintained in a savings account. 
A)  The value of some companies' stocks have grown. 
B)  The stock market can experience a decline in its overall value. 
C)  The return on a savings account is not as high as the return on some stocks. 
D)  The interest rate earned in a savings account may be lower than the rate of inflation. 
E)  A minimum balance must be maintained in a savings account.

Question 4

"I am a chemist with the nation's largest chemical company.We have secretly developed a cure for one of the world's most serious epidemics.Before this news gets out,I am going to buy as many shares of stock in my company as I can get my hands on.Then I'll sit back and watch the stock price head for the sky." The person making this statement is about to engage in

Accepted Answer

A)  a news conference. 
B)  insider trading. 
C)  open-market operations. 
D)  further research. 
E)  selling shares of stock. 
A)  a news conference. 
B)  insider trading. 
C)  open-market operations. 
D)  further research. 
E)  selling shares of stock.

Question 5

In practical terms,what is the difference between registered bonds and bearer bonds?

Accepted Answer

A)  Registered bonds have to be registered with the Government of Canada,but bearer bonds do not. 
B)  Registered bonds generally pay lower rates of interest than bearer bonds. 
C)  Registered bondholders automatically receive interest cheques,but holders of bearer bonds have to clip coupons and send them to the company. 
D)  Registered bonds have lower financial risk than bearer bonds. 
E)  There is really no practical difference between registered and bearer bonds. 
A)  Registered bonds have to be registered with the Government of Canada,but bearer bonds do not. 
B)  Registered bonds generally pay lower rates of interest than bearer bonds. 
C)  Registered bondholders automatically receive interest cheques,but holders of bearer bonds have to clip coupons and send them to the company. 
D)  Registered bonds have lower financial risk than bearer bonds. 
E)  There is really no practical difference between registered and bearer bonds.

Question 6

If you purchase a round lot of stock quoted in The Globe and Mail at $10.75 per share,the total price you would pay for the stock is ________ plus commission.

Accepted Answer

A)  $1034.00 
B)  $107.50 
C)  $10.34 
D)  $1075.00 
E)  $1000.75 
A)  $1034.00 
B)  $107.50 
C)  $10.34 
D)  $1075.00 
E)  $1000.75

Question 7

The type of bonds that are said to have "inferior claims" on a corporation's assets are

Accepted Answer

A)  secured bonds. 
B)  debentures. 
C)  registered bonds. 
D)  callable bonds. 
E)  bearer bonds. 
A)  secured bonds. 
B)  debentures. 
C)  registered bonds. 
D)  callable bonds. 
E)  bearer bonds.

Question 8

Differentiate between odd and round lots.

Accepted Answer

A round lot is a purchase or s

Question 9

Suppose you have a put option that allows you to sell 100 shares of Alcan for $54.50 per share any time before October 2013.If the stock price falls to $45.00 per share,your profit is

Accepted Answer

A)  $9.50 
B)  $54.50 
C)  $950.00 
D)  $45.00 
E)  $0.00 
A)  $9.50 
B)  $54.50 
C)  $950.00 
D)  $45.00 
E)  $0.00

Question 10

Discount brokers are gradually driving full-service brokers out of business because discount brokers charge much lower fees.

Accepted Answer

A) True 
 B)False

Question 11

What is a short sale?

Accepted Answer

A short sale is a stock sale i

Question 12

Which of the following are aspects of a short sale by an investor?

Accepted Answer

A)  The investor must return the stock to the broker at some point. 
B)  It means borrowing stock from a broker. 
C)  Money is not required up front. 
D)  The investor hopes the price of the stock will fall. 
E)  All of these are aspects. 
A)  The investor must return the stock to the broker at some point. 
B)  It means borrowing stock from a broker. 
C)  Money is not required up front. 
D)  The investor hopes the price of the stock will fall. 
E)  All of these are aspects.

Question 13

Suppose you bought a $1000 par-value bond in 1999 for $650.Its stated interest rate is 6 percent,and its maturity or redemption date was 2019.Based on your actual investment of $650,your yield is 7.2 percent.

Accepted Answer

A) True 
 B)False

Question 14

Identify some of the different types of orders that you can place when you decide to buy or sell a security.

Accepted Answer

- market order: an order to a broker to

Question 15

Assume you bought a $1000 par-value bond in 2004 for 75 1/4 with an interest rate of 7.5%.If you held the bond until maturity in 2014,what would be the total amount that you would earn on this bond?

Accepted Answer

A)  $1000.00 
B)  $750 
C)  $779.50 
D)  $887.50 
E)  $997.50 
A)  $1000.00 
B)  $750 
C)  $779.50 
D)  $887.50 
E)  $997.50

Question 16

A prospectus is a statement filed by the issuing company before the issuance of a new security that contains detailed information about the company and the proposed new issue.

Accepted Answer

A) True 
 B)False

Question 17

What is cumulative preferred stock?

Accepted Answer

A)  By law,the preferred stock cannot pay dividends out every year. 
B)  Preferred shareholders vote whereas common shareholders do not. 
C)  This stock's dividend payments are automatically reinvested into the firm,thus allowing for compounding the return on investment. 
D)  If dividend payments are missed in one year,they are paid later and are paid before any common stock dividends. 
E)  Cumulative preferred shareholders have the right to purchase shares of a new stock issue before it is offered to the general public. 
A)  By law,the preferred stock cannot pay dividends out every year. 
B)  Preferred shareholders vote whereas common shareholders do not. 
C)  This stock's dividend payments are automatically reinvested into the firm,thus allowing for compounding the return on investment. 
D)  If dividend payments are missed in one year,they are paid later and are paid before any common stock dividends. 
E)  Cumulative preferred shareholders have the right to purchase shares of a new stock issue before it is offered to the general public.

Question 18

Corporation B had sales revenue last year of $20 million,operating expenses of $16 million,and net profit of $4 million.There are 2 million shares of stock oustanding.What is the par value of the company's stock?

Accepted Answer

A)  $5 
B)  $4.83 
C)  $4 
D)  $10 
E)  The par value cannot be determined with the information given. 
A)  $5 
B)  $4.83 
C)  $4 
D)  $10 
E)  The par value cannot be determined with the information given.

Question 19

Explain the process by which securities are bought and sold.

Accepted Answer

Investors generally use such financial i

Question 20

Buying securities on margin is risky because margin securities are investments in companies that are not performing well.

Accepted Answer

A) True 
 B)False

Don has an agreement to purchase a specified amount of a commodity at a given price on a set future date.Don has a

Bondholders have a claim on a corporation's assets and earnings that comes before the claims of common and preferred shareholders.

In practical terms,what is the difference between registered bonds and bearer bonds?

If you purchase a round lot of stock quoted in The Globe and Mail at $10.75 per share,the total price you would pay for the stock is ________ plus commission.

The type of bonds that are said to have "inferior claims" on a corporation's assets are

Differentiate between odd and round lots.

Suppose you have a put option that allows you to sell 100 shares of Alcan for $54.50 per share any time before October 2013.If the stock price falls to $45.00 per share,your profit is

Discount brokers are gradually driving full-service brokers out of business because discount brokers charge much lower fees.

What is a short sale?

Which of the following are aspects of a short sale by an investor?

Suppose you bought a $1000 par-value bond in 1999 for $650.Its stated interest rate is 6 percent,and its maturity or redemption date was 2019.Based on your actual investment of $650,your yield is 7.2 percent.

Identify some of the different types of orders that you can place when you decide to buy or sell a security.

Assume you bought a $1000 par-value bond in 2004 for 75 1/4 with an interest rate of 7.5%.If you held the bond until maturity in 2014,what would be the total amount that you would earn on this bond?

A prospectus is a statement filed by the issuing company before the issuance of a new security that contains detailed information about the company and the proposed new issue.

What is cumulative preferred stock?

Corporation B had sales revenue last year of $20 million,operating expenses of $16 million,and net profit of $4 million.There are 2 million shares of stock oustanding.What is the par value of the company's stock?

Explain the process by which securities are bought and sold.

Buying securities on margin is risky because margin securities are investments in companies that are not performing well.

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

Don has an agreement to purchase a specified amount of a commodity at a given price on a set future date.Don has a

Bondholders have a claim on a corporation's assets and earnings that comes before the claims of common and preferred shareholders.

In practical terms,what is the difference between registered bonds and bearer bonds?

If you purchase a round lot of stock quoted in The Globe and Mail at $10.75 per share,the total price you would pay for the stock is ________ plus commission.

The type of bonds that are said to have "inferior claims" on a corporation's assets are

Differentiate between odd and round lots.

Suppose you have a put option that allows you to sell 100 shares of Alcan for $54.50 per share any time before October 2013.If the stock price falls to $45.00 per share,your profit is

Discount brokers are gradually driving full-service brokers out of business because discount brokers charge much lower fees.

What is a short sale?

Which of the following are aspects of a short sale by an investor?

Suppose you bought a $1000 par-value bond in 1999 for $650.Its stated interest rate is 6 percent,and its maturity or redemption date was 2019.Based on your actual investment of $650,your yield is 7.2 percent.

Identify some of the different types of orders that you can place when you decide to buy or sell a security.

Assume you bought a $1000 par-value bond in 2004 for 75 1/4 with an interest rate of 7.5%.If you held the bond until maturity in 2014,what would be the total amount that you would earn on this bond?

A prospectus is a statement filed by the issuing company before the issuance of a new security that contains detailed information about the company and the proposed new issue.

What is cumulative preferred stock?

Corporation B had sales revenue last year of $20 million,operating expenses of $16 million,and net profit of $4 million.There are 2 million shares of stock oustanding.What is the par value of the company's stock?

Explain the process by which securities are bought and sold.

Buying securities on margin is risky because margin securities are investments in companies that are not performing well.

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