Question 1

Another term for portfolio strategy is:

Accepted Answer

A)  modulation model
B)  formula model
C)  allocation model
D)  equity modelE) A) and C)
F) B) and C)

Question 2

The over-the-counter market utilizes an electronic securities trading system.

Accepted Answer

A) True 
 B)False

Question 3

Growth stocks offer investors the attractive combination of low risk and high returns.

Accepted Answer

A) True 
 B)False

Question 4

Which of the following is not an odd lot of stock?

Accepted Answer

A)  10 shares
B)  20 shares
C)  3000 shares
D)  78 sharesE) None of the above
F) A) and B)

Question 5

are the firm's after tax profits that are distributed to stockholders.

Accepted Answer

A)  Equity capital
B)  Interest payments
C)  Dividends
D)  Retained earningsE) A) and B)
F) A) and C)

Question 6

Mutual funds offer small investors an opportunity to diversify their investments.

Accepted Answer

A) True 
 B)False

Question 7

Bond interest is usually paid in two times each year, even though the interest rate that is usually quoted is an annual rate.

Accepted Answer

A) True 
 B)False

Question 8

The Reaching Beyond Our Border box in Chapter 19 provides the following advice when trading in foreign stocks?

Accepted Answer

A)  Proceed with caution when investing in the stock of a firm where the home country has political unrest and an unstable currency.
B)  Avoid purchasing ADRs [American Depository Receipts] because you never win with the exchange rates.
C)  When buying or selling foreign securities, avoid mutual funds and exchange traded funds. They seem to have hidden stocks that are worthless intermixed with some good ones.
D)  Remember: the lower the risk, the higher the return.E) A) and B)
F) C) and D)

Question 9

After retirement, Hector began a search for a low-risk investment. He should consider buying a secured bond of a major corporation.

Accepted Answer

A) True 
 B)False

Question 10

Preferred stockholders receive dividend payments before common stockholders are paid any dividends.

Accepted Answer

A) True 
 B)False

Question 11

The traditional market barometer used to measure the direction of the stock market is the:

Accepted Answer

A)  Value Line Composite.
B)  Moody's Investment Index.
C)  Dow Jones Industrial Average.
D)  Hoover's Industrial Index.E) B) and C)
F) B) and D)

Question 12

represent a powerful force in the buying and selling of corporate securities.

Accepted Answer

A)  Individual investors
B)  Mutual banks
C)  Institutional investors
D)  Investment banksE) B) and D)
F) A) and B)

Question 13

The cost of a firm borrowing money is called the:

Accepted Answer

A)  interest rate.
B)  dividend payment.
C)  prime charge.
D)  opportunity charge.E) A) and C)
F) B) and D)

Question 14

Insider trading refers to someone who benefits unfairly from information about a security not available to the general public.

Accepted Answer

A) True 
 B)False

Question 15

A mutual fund that carries a load will require the investor to pay a commission, only if the fund appreciates in price.

Accepted Answer

A) True 
 B)False

Question 16

The investor always pays a fee when purchasing a share of a mutual fund.

Accepted Answer

A) True 
 B)False

Question 17

Ebony Enterprises decides to pay off its bonds several years before the maturity date. Apparently, the bonds .

Accepted Answer

A)  contain an early dismissal clause
B)  have an early retirement option
C)  are callable
D)  have discount authorizationE) A) and B)
F) All of the above

Question 18

have a set dollar goal the fund manager wants to manage. Once the fund has reached that goal, it does not accept new investors.

Accepted Answer

A)  No load funds
B)  Closed-end funds
C)  Drop-off funds
D)  Zero Sum loadE) B) and D)
F) A) and C)

Question 19

Investors in preferred stock receive a guarantee that missed dividends will accumulate and potentially be paid later.

Accepted Answer

A)  participating
B)  superior
C)  convertible
D)  cumulativeE) A) and D)
F) A) and B)

Question 20

The market price and growth potential of a common stock depends heavily on the performance of the firm in meeting its objectives.

Accepted Answer

A) True 
 B)False

Exam 19: Using Securities Markets for Financing and Investing Opportunities

After retirement, Hector began a search for a low-risk investment. He should consider buying a secured bond of a major corporation.

Correct AnswerverifiedShow Answer

Which of the following is not an odd lot of stock?

Correct AnswerverifiedShow Answer

The cost of a firm borrowing money is called the:

Correct AnswerverifiedShow Answer

Investors in preferred stock receive a guarantee that missed dividends will accumulate and potentially be paid later.

Correct AnswerverifiedShow Answer

Preferred stockholders receive dividend payments before common stockholders are paid any dividends.

Correct AnswerverifiedShow Answer

The traditional market barometer used to measure the direction of the stock market is the:

Correct AnswerverifiedShow Answer

The investor always pays a fee when purchasing a share of a mutual fund.

Correct AnswerverifiedShow Answer

are the firm's after tax profits that are distributed to stockholders.

Correct AnswerverifiedShow Answer

represent a powerful force in the buying and selling of corporate securities.

Correct AnswerverifiedShow Answer

Mutual funds offer small investors an opportunity to diversify their investments.

Correct AnswerverifiedShow Answer

The market price and growth potential of a common stock depends heavily on the performance of the firm in meeting its objectives.

Correct AnswerverifiedShow Answer

Growth stocks offer investors the attractive combination of low risk and high returns.

Correct AnswerverifiedShow Answer

have a set dollar goal the fund manager wants to manage. Once the fund has reached that goal, it does not accept new investors.

Correct AnswerverifiedShow Answer

Another term for portfolio strategy is:

Correct AnswerverifiedShow Answer

The Reaching Beyond Our Border box in Chapter 19 provides the following advice when trading in foreign stocks?

Correct AnswerverifiedShow Answer

A mutual fund that carries a load will require the investor to pay a commission, only if the fund appreciates in price.

Correct AnswerverifiedShow Answer

The over-the-counter market utilizes an electronic securities trading system.

Correct AnswerverifiedShow Answer

Ebony Enterprises decides to pay off its bonds several years before the maturity date. Apparently, the bonds .

Correct AnswerverifiedShow Answer

Bond interest is usually paid in two times each year, even though the interest rate that is usually quoted is an annual rate.

Correct AnswerverifiedShow Answer

Insider trading refers to someone who benefits unfairly from information about a security not available to the general public.

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified