Question 1

Which of the following describes a mutual fund that charges no commission to buy or sell its shares?

Accepted Answer

A)  Open-end fund
B)  Closed-end fund
C)  No-load fund
D)  Front-load fund

Question 2

_____________ 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 load

Question 3

Georgia Corporation,known for its very generous dividend policy,easily attracts investors.These dividend payments basically represent:

Accepted Answer

A)  a part of the firm's profit distributed to stockholders.
B)  the increase in market share the company has earned.
C)  current value of the firm's stock holdings.
D)  income that is sheltered from taxes.

Question 4

In reviewing the firms whose stocks comprise the Dow Jones Industrial Average,we discover:

Accepted Answer

A)  The same 30 stocks have been used since the inception of the indicator.
B)  Different companies are used each year.
C)  These stocks change periodically as deemed appropriate.
D)  There is an even mix between big and small companies.

Question 5

A mutual fund company buys securities from corporations and governments,and packages them together into a "mutual fund".It then ________________.

Accepted Answer

A)  sells shares of this packaged investment to interested investors
B)  deposits the mutual fund into a pension fund for institutional investors
C)  charges investors a fee to find out how these investments fared,so that investors can decide for themselves as to whether they want to own the investments
D)  gives investors the option to bid on a share of this investment

Question 6

The stocks of high quality companies such as Coca-Cola and Microsoft are called blue chip stocks.

Accepted Answer

A) True 
 B)False

Question 7

If an investor's strategy is: "buy low,and sell high." We could conclude that his optimism regarding future stock price increases indicates that he is:

Accepted Answer

A)  bullish.
B)  bearish.
C)  only marginally confident about the stock market.
D)  lionish.

Question 8

From an investor's viewpoint,bonds generally provide a safer investment option than does the stock of the same corporation.

Accepted Answer

A) True 
 B)False

Question 9

Issuing ________ increases a firm's debt and may adversely affect the financial community's perception of the firm.

Accepted Answer

A)  common stock
B)  bonds
C)  preferred stock
D)  retained earnings

Question 10

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)  cumulative

Question 11

_________ 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 banks

Question 12

________ stocks represent investments in emerging fields that have the potential to realize better than average increases in the stock's prices.

Accepted Answer

A)  Blue chip
B)  Penny
C)  Growth
D)  Income

Question 13

The risk/return tradeoff investors assume means:

Accepted Answer

A)  the less you risk,the more you stand to gain.
B)  the same as diversification of your portfolio.
C)  you will assume added risk,if you believe you can get a greater return.
D)  the goal is to never risk liquidity - your investments should always be liquid and of short duration.

Question 14

Seattle Music,Inc.recently offered bonds for sale to the public.The unsecured corporate bond paid interest of 9% to investors for the twenty-year life of the bonds.Seattle Music is obligated to:

Accepted Answer

A)  Represent each bondholder as an owner in the company.
B)  Pay interest semi-annually.
C)  Pay stockholders their dividends,before paying bondholders their interest.
D)  Pay each owner their principal if and when they want to cash-in their investment.

Question 15

Which of the following describes a benefit enjoyed by investors in mutual funds?

Accepted Answer

A)  Guaranteed dividend payments are received annually.
B)  Investment risk is eliminated.
C)  Investors buy an ownership interest in many different companies.
D)  Investors exercise managerial authority in many different companies.

Question 16

Securities markets help companies raise long-term debt and equity financing.

Accepted Answer

A) True 
 B)False

Question 17

How do investment bankers generate revenues for their firms?

Accepted Answer

A)  They invest their own funds,or the funds of others,in mutual funds and commodities.
B)  They earn commissions by managing the investments of insurance companies and mutual funds.
C)  They buy,at a discount,the entire issue of a new security and then sell the issue to investors at full price.
D)  They receive consulting revenues from the advice they offer the Securities and Exchange Commission.

Question 18

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 19

When reading mutual fund quotations,the ________ is the price per share.

Accepted Answer

A)  NAV Net Asset Value) 
B)  PSV Per Share Value) 
C)  MFV Mutual Fund Value) 
D)  PAV Partial Asset Value)

Question 20

Gerald,a recent graduate of a community college,is about to make his first investment in the stock market.Which of the following would be a cautious way for Gerald to start investing?

Accepted Answer

A)  Future contracts in oil
B)  Index funds
C)  Short-selling technology stocks
D)  Commodity market transactions in precious metals

Exam 19: Using Securities Markets for Financing and Investing Opportunities

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

Correct AnswerverifiedShow Answer

________ stocks represent investments in emerging fields that have the potential to realize better than average increases in the stock's prices.

Correct AnswerverifiedShow Answer

From an investor's viewpoint,bonds generally provide a safer investment option than does the stock of the same corporation.

Correct AnswerverifiedShow Answer

Which of the following describes a mutual fund that charges no commission to buy or sell its shares?

Correct AnswerverifiedShow Answer

If an investor's strategy is: "buy low,and sell high." We could conclude that his optimism regarding future stock price increases indicates that he is:

Correct AnswerverifiedShow Answer

Securities markets help companies raise long-term debt and equity financing.

Correct AnswerverifiedShow Answer

Issuing ________ increases a firm's debt and may adversely affect the financial community's perception of the firm.

Correct AnswerverifiedShow Answer

In reviewing the firms whose stocks comprise the Dow Jones Industrial Average,we discover:

Correct AnswerverifiedShow Answer

Georgia Corporation,known for its very generous dividend policy,easily attracts investors.These dividend payments basically represent:

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

The risk/return tradeoff investors assume means:

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

The stocks of high quality companies such as Coca-Cola and Microsoft are called blue chip stocks.

Correct AnswerverifiedShow Answer

Gerald,a recent graduate of a community college,is about to make his first investment in the stock market.Which of the following would be a cautious way for Gerald to start investing?

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

A mutual fund company buys securities from corporations and governments,and packages them together into a "mutual fund".It then ________________.

Correct AnswerverifiedShow Answer

Which of the following describes a benefit enjoyed by investors in mutual funds?

Correct AnswerverifiedShow Answer

How do investment bankers generate revenues for their firms?

Correct AnswerverifiedShow Answer

Seattle Music,Inc.recently offered bonds for sale to the public.The unsecured corporate bond paid interest of 9% to investors for the twenty-year life of the bonds.Seattle Music is obligated to:

Correct AnswerverifiedShow Answer

When reading mutual fund quotations,the ________ is the price per share.

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