SECURITIES AND INVESTMENTS A

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1) A professional who is licensed to buy and sell stocks is a

1 point

A) stockbroker

B) realtor

C) banker

D) insurance agent

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2) Less than 100 shares of stock is a(n)

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A) partial lot

B) round lot

C) full lot

D) odd lot

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3) Shares bought or sold in multiples of 100 are referred to as a

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A) diversified lot

B) odd lot

C) bond

D) round lot

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4) An assigned (and often arbitrary) dollar amount that is printed on a stock certificate is the

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A) par value

B) face value

C) market value

D) adjusted value

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5) Financial interest in the life of property is referred to as

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A) speculative risk

B) pure risk

C) personal risk

D) insurable interest

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6) Putting an insurance policyholder back in the same financial condition as before a loss occurs is referred to as

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A) certification

B) probability

C) resolution

D) indemnification

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7) _____ is a chance of loss with no chance for gain.

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A) Personal risk

B) Property risk

C) Pure risk

D) Speculative risk

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8) _____ include possible losses involving income or standard of living.

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A) Personal risks

B) Pure risks

C) Property risks

D) Liability risks

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9) The ___ statement must be filed annually with the SEC by all firms having securities listed on a securities exchange or traded in the OTC market.

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A) W-2

B) 1040

C) form 10-K

D) W-4

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10) A brokerage account in which customers can only make cash transactions is the

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A) margin account

B) wrap account

C) custodial account

D) cash account

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11) _____ is a small company financial index.

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A) S & P 500

B) Dow Jones Industrials

C) Russell 2000

D) NYSE

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12) Using borrowed money to increase returns is called

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A) money laundering

B) inflated valuation

C) an illegal practice

D) leverage

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13) Profit that results from investments into a capital asset, such as stocks, bonds, or real estate, which exceeds the purchase price is called

1 point

A) partial surrender

B) nominal yield

C) current yield

D) capital gains

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14) What is the name of the technique for estimating the number of years required to double your money at a given rate of return?

1 point

A) inflation

B) Rule of 72

C) Rule of Thumb

D) speculation

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15) The ____ allows individuals to contribute a limited yearly sum toward their retirement each year, with earnings tax-deferred until withdrawals begin at age 59 ½ or older.

1 point

A) IRA

B) mutual fund

C) trust fund

D) CD

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16) The plan for sharing the risk of financial loss resulting from an accident or illness is

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A) term life insurance

B) whole life insurance

C) life insurance

D) health insurance

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17) A life insurance policy that remains in effect for a specified period of time is

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A) umbrella insurance

B) whole life insurance

C) universal life insurance

D) term life insurance

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18) All of the following are considerations to complete client policy statements except

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A) constraints

B) objectives

C) time horizon

D) trends

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19) A basis for comparison of investment options is referred to as the

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A) investment evaluation

B) earnings index

C) criteria standard

D) economic index

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20) _____ includes projections and recommendations about potential investments based on available current data.

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A) Arbitration

B) Descriptive information

C) Analytical information

D) Mediation

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21) A retirement plan for non-profit corporations in which the employee chooses a percentage of their salary to set aside and the company may put in a matching amount is the

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A) 403 (d)

B) 401 (k)

C) 403 (b)

D) 401 (c)

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22) A company sponsored retirement plan that specifies retirement benefits, based on wages earned and years of service is the

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A) social security plan

B) defined benefit plan

C) defined contribution plan

D) inheritance tax plan

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23) Which of the following is NOT a common itemized deduction for income taxes?

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A) mortgage interest

B) medical expenses

C) interest income

D) charitable contributions

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24) The tax form that lists your interest earnings for the year is the

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A) W-4

B) 1099-DIV

C) 1099-INT

D) W-2

Clear selection

25) A short-term unsecured loan to a corporation issued at a discount from the face value is a

1 point

A) mortgage-backed security

B) commercial paper

C) negotiable CD

D) realty investment

Clear selection

26) Loans for homes and land are called

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A) unsecured loans

B) simple interest loans

C) short-term loans

D) mortgages

Clear selection

27) Interest on _________ can be deducted on income taxes

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A) mortgages

B) revolving credit cards

C) car loans

D) department store credit card charges

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28) Dying without a will is called

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A) intestate

B) probate

C) interstate

D) government estate

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29) A method of spreading individual risk among a large group of people to make losses more affordable for all is referred to as

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A) insurance

B) return

C) estate

D) credit

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30) An addition or supplement that explains, modifies, or revokes a will or part of one is the

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A) trust

B) executive

C) codicil

D) proclamation

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31) At the time of a person’s death, everything they own minus debt is called the

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A) estate

B) net income

C) inheritance

D) property valuation

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32) ____ is an unincorporated mutual fund structure that allows funds to hold assets and pass profits through to the individual owners, rather than reinvesting them back into the fund.

1 point

A) Will

B) Escrow

C) Savings bond

D) Unit trust

Clear selection

33) _____ is a type of mutual fund that does not have restrictions on the amount of shares the fund will issue and also buy back shares when investors wish to sell.

1 point

A) Stock market investment

B) Treasury bill

C) Bond issue

D) Open ended investment

Clear selection

34) _____ are agreed to by the client and the broker as a result of their negotiations, typically available to large institutional transactions and to individual investors who maintain large accounts.

1 point

A) Negotiated commissions

B) Load fees

C) Mediations

D) Quotations

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35) The brokerage account of a minor requires a parent or guardian of all transactions. This is an example of a

1 point

A) cash account

B) custodial account

C) wrap account

D) margin account

Clear selection

36) Persons who receive property from someone who has died are

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A) witnesses

B) family members

C) trustees

D) heirs

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37) ______ is a type of joint account ownership that upon the death of one of the owners, the surviving owners share the value of the account equally.

1 point

A) Social security

B) Power of attorney

C) Joint with rights of survivorship

D) Inheritance declaration

Clear selection

38) The person designated in a will to carry out your instructions regarding the distribution of your assets is the

1 point

A) municipal judge

B) executor

C) state justice

D) heir

Clear selection

39) _______ is a public listed company designed to generate profits for its shareholders by investing in the shares of other companies.

1 point

A) Investment trust

B) Investment bond

C) Unit trust

D) Mortgage

Clear selection

40) Investment funds risk can be reduced through

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A) high-risk speculation

B) the purchase of one blue-chip stock fund

C) diversification

D) inflation

Clear selection

41) The largest stock exchange in the world is located in

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A) New York City

B) London

C) Paris

D) Beijing

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42) An increase in the value of an asset is called

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A) asset expansion

B) positive net worth

C) capital gain

D) asset appreciation

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43) _______ are super-sites on the Web that bring together a wide range of investing features, such as real-time quotes, stock and mutual fund screens, portfolio trackers, news, research, and transaction capabilities, along with other personal finance features.

1 point

A) Round lots

B) Custodial accounts

C) Mutual funds

D) Financial portals

Clear selection

44) The measurement of the value of stocks, usually divided into eighths.

1 point

A) profit

B) dividend

C) par

D) point

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45) The price of the stock is divided by its earnings for the last year to compare the price of the stock to other stocks. This is an example of the

1 point

A) dividend

B) earning evaluation

C) valuation

D) price-earning ratio (P/E)

Clear selection

46) An investor purchased a corporate bond for 97 3/8. If the bond is sold for 99 3/8, the investor has a profit of

1 point

A) $2

B) $200

C) $.20

D) $20

Clear selection

47) A unit of ownership in a corporation is a

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A) bond

B) stock

C) asset

D) security

Clear selection

48) Stocks that have a consistent history of paying high dividends are

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A) speculative stocks

B) common stocks

C) income stocks

D) growth stocks

Clear selection

49) An increase in the number of outstanding shares of a company’s stock is a

1 point

A) round lot

B) odd lot

C) stock expansion

D) stock split

Clear selection

50) An order to buy or sell a stock only if the price is within limits that you specify is a

1 point

A) day trader

B) non-limitation order

C) limit order

D) auto transaction

Clear selection

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