Question 1

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

Accepted Answer

A)  Maturity 
B)  Price-earnings ratio 
C)  Diversification 
D)  Stratification 
E)  Duration

Question 2

Which of the following is least likely to be an investment objective?

Accepted Answer

A)  enhance current income 
B)  save for a major purchase 
C)  pay monthly bills 
D)  accumulate funds for retirement 
E)  seek shelter from taxes

Question 3

Unlisted securities are traded on the

Accepted Answer

A)  SEC market. 
B)  SIPC. 
C)  OTC market. 
D)  AMEX. 
E)  NYSE.

Question 4

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. 
-An IPO is be sold in the [primary | secondary] market many times.

Accepted Answer

A) for the first item 
B) for the second item 
C) if neither item will correctly complete the statement.

Question 5

On-line trading is the only valuable investment service available through the Internet.

Accepted Answer

A) True 
 B)False

Question 6

During a bear market,security prices generally

Accepted Answer

A)  hold value 
B)  rapidly increase in value 
C)  remain neutral 
D)  decline in value 
E)  consolidate in value

Question 7

Trading on margin can magnify losses or profits.

Accepted Answer

A) True 
 B)False

Question 8

The margin required on the purchase of common stock is currently set at

Accepted Answer

A)  30%. 
B)  40%. 
C)  50%. 
D)  60%. 
E)  70%.

Question 9

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. 
-ABC stock is [up 14.1% | down 27%] since the beginning of the year.

Accepted Answer

A) for the first item 
B) for the second item 
C) if neither item will correctly complete the statement.

Question 10

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. 
-You are going to buy stock on margin.You will be required to put up a minimum of [50 | 60] percent of the money needed to make the purchase.

Accepted Answer

A) for the first item 
B) for the second item 
C) if neither item will correctly complete the statement.

Question 11

You have been offered an opportunity to buy shares of a diversified collection of securities.You will be investing in

Accepted Answer

A)  bonds. 
B)  common stock. 
C)  mutual funds. 
D)  real estate. 
E)  stock opt ions.

Question 12

The federal government regulates securities markets through the

Accepted Answer

A)  Department of Commerce. 
B)  Federal Reserve System. 
C)  National Association of Securities Dealers. 
D)  Securities and Exchange Commission. 
E)  Federal Securities Agency.

Question 13

The most popular average/index covering stocks listed on the New York Stock Exchange is the New York Stock Exchange Index.

Accepted Answer

A) True 
 B)False

Question 14

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. 
-The collection of investments you select to meet your investment goals is called your [portfolio | allocation].

Accepted Answer

A) for the first item 
B) for the second item 
C) if neither item will correctly complete the statement.

Question 15

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. 
-The majority of the securities laws were enacted [before | after] 1930.

Accepted Answer

A) for the first item 
B) for the second item 
C) if neither item will correctly complete the statement.

Question 16

Listed securities are traded on organized exchanges.

Accepted Answer

A) True 
 B)False

Question 17

Discount brokers will

Accepted Answer

A)  execute orders. 
B)  give advice. 
C)  watch portfolios. 
D)  do all of these. 
E)  do none of these.

Question 18

A retail stockbroker buys and sells securities on behalf of clients.

Accepted Answer

A) True 
 B)False

Question 19

In terms of market capitalization,Apple is the biggest company in the world.

Accepted Answer

A) True 
 B)False

Question 20

Stockbrokerage firms often do industry analysis.

Accepted Answer

A) True 
 B)False

Exam 11: Investment Planning

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

Which of the following is least likely to be an investment objective?

Unlisted securities are traded on the

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. -An IPO is be sold in the [primary | secondary] market many times.

On-line trading is the only valuable investment service available through the Internet.

During a bear market,security prices generally

Trading on margin can magnify losses or profits.

The margin required on the purchase of common stock is currently set at

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. -ABC stock is [up 14.1% | down 27%] since the beginning of the year.

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. -You are going to buy stock on margin.You will be required to put up a minimum of [50 | 60] percent of the money needed to make the purchase.

You have been offered an opportunity to buy shares of a diversified collection of securities.You will be investing in

The federal government regulates securities markets through the

The most popular average/index covering stocks listed on the New York Stock Exchange is the New York Stock Exchange Index.

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. -The collection of investments you select to meet your investment goals is called your [portfolio | allocation].

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. -The majority of the securities laws were enacted [before | after] 1930.

Listed securities are traded on organized exchanges.

Discount brokers will

A retail stockbroker buys and sells securities on behalf of clients.

In terms of market capitalization,Apple is the biggest company in the world.

Stockbrokerage firms often do industry analysis.