SECURITIES AND INVESTMENTS B

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75) A legal document that offers securities or mutual funds shares for sale is the

1 point

A) proxy

B) prospectus

C) return

D) trust

Clear selection

60) NASDAQ is an example of a

1 point

A) secondary market

B) bond market

C) real estate market

D) primary market

Clear selection

100) The SEC developed the ______ to handle investor complaints.

1 point

A) NYSE

B) Office of Investor Education and Advocacy

C) NASDAQ

D) Federal Reserve

Clear selection

74) The spreading of risk among many types of investments is called

1 point

A) speculation

B) risk avoidance

C) diversification

D) indemnification

Clear selection

80) A bond the issuer has the right to pay off before its maturity date is a

1 point

A) treasury bond

B) callable bond

C) global fund

D) balance fund

Clear selection

93) An investment strategy that includes the systematic purchase of an equal dollar amount of the securities at regular intervals is referred to as

1 point

A) day trader

B) direct investment

C) dollar cost averaging

D) leverage

Clear selection

96) The governmental agency established in 1934 to protect stock and bond investors is the

1 point

A) NASDAQ

B) Securities and Exchange Commission

C) FTC

D) New York Stock Exchange

Clear selection

99) The rule requiring senior executives to disclose critical information simultaneously to investment professionals and the public via press releases or SEC filings is the

1 point

A) material evidence rule

B) fair disclosure rule (Regulation FD)

C) description information disclosure

D) full disclosure requirement

Clear selection

61) The actual interest rate an account pays per year, including compounding is the

1 point

A) annual percentage rate

B) simple interest rate

C) average daily rate

D) daily interest rate

Clear selection

What is your name? *

59) A corporation’s first sale of stock to public investors is a(n)

1 point

A) common stock

B) IPO

C) CD

D) IRA

Clear selection

90) Cattle, oil, gold, and metals are all examples of

1 point

A) collectibles

B) liabilities

C) securities

D) commodities

Clear selection

65) All of the following are sources of investment information except

1 point

A) business reviews

B) research reports

C) financial portals

D) industry annual reports

Clear selection

82) The interest rate named on the bond certificate is

1 point

A) nominal yield

B) maximum yield

C) calculated yield

D) adjusted yield

Clear selection

69) Two quarters (6 months) or more of economic decline indicates an economic

1 point

A) recession

B) boom

C) growth period

D) depression

Clear selection

54) Investments with the chance of quick or considerable profit are

1 point

A) speculative investments

B) securities

C) speculative stock

D) diversified investments

Clear selection

97) Which of the following is not an example of financial fraud?

1 point

A) Tax evasion

B) Stock market investment

C) Embezzlement

D) Bribery

Clear selection

70) The _________ measures inflation/deflation for basic consumer goods and services.

1 point

A) Consumer Product Index

B) Gross Domestic Product

C) collateralized mortgage operation

D) inflation index

Clear selection

57) Growth is an investment objective that seeks

1 point

A) diversification

B) stock splits

C) capital depreciation

D) capital appreciation

Clear selection

94) ______ are customized contracts that are traded in the over-the-counter (OTC) market between private parties.

1 point

A) SWAPS

B) Convertible stocks

C) Preferred stocks

D) Common stocks

Clear selection

95) The ___ is not required to be registered under the Securities Act of 1933 but it is subject to anti-fraud rules.

1 point

A) preferred security

B) listed security

C) exempt security

D) common security

Clear selection

79) A sales fee paid when purchasing a mutual fund through a broker is the

1 point

A) tax

B) commission

C) proxy

D) load

Clear selection

64) Insider trading in the stock market is an illegal activity that represents a(n)

1 point

A) ethical issue

B) objective issue

C) mission issue

D) leadership issue

Clear selection

51) The type of stock that pays a fixed dividend but has no voting rights is

1 point

A) preferred stock

B) growth stock

C) income stock

D) common stock

Clear selection

83) Interest-bearing debt issued by state or local governments to finance operation or capital costs are called

1 point

A) mutual funds

B) treasury bonds

C) savings bonds

D) municipal bonds

Clear selection

91) The auction market in which participants buy and sell commodity contracts for delivery on a specified date is the

1 point

A) over the counter market

B) NASDAQ

C) NYSE

D) futures market

Clear selection

58) All of the following types of securities trade in the secondary market EXCEPT

1 point

A) EE bonds

B) common stock

C) municipal bonds

D) debentures

Clear selection

92) _____ is a benefit in the form of an option given by a company to an employee to buy stock in the company at a discount or at a stated fixed price.

1 point

A) Tax sheltered annuity

B) Stock option

C) Mutual Fund

D) Stock quote

Clear selection

77) The market value of the securities that a mutual fund has purchased minus any liabilities owed is called the

1 point

A) face value

B) net asset value

C) par value

D) market value

Clear selection

55) A bond that has a low rating or no rating at all is a

1 point

A) round lot

B) junk bond

C) blue-chip bond

D) mutual fund

Clear selection

85) Who would receive funds first in the event of bankruptcy?

1 point

A) administrative fees of bankruptcy

B) secured creditors

C) debentures

D) general creditors

Clear selection

84) Bonds backed up by specific assets as collateral are

1 point

A) common bonds

B) unsecured bonds

C) corporate bonds

D) secured bonds

Clear selection

81) Debt securities which represent loans from investors to a corporation are

1 point

A) dividends

B) stocks

C) royalties

D) bonds

Clear selection

56) _____ stocks receive dividends first before other forms of stock.

1 point

A) Blue chip

B) Common

C) Preferred

D) Participating

Clear selection

52) Shares of ownership in a corporate or public body are called

1 point

A) stocks

B) liabilities

C) assets

D) bonds

Clear selection

73) A mutual fund that tries to match the performance of a particular securities index by investing in the companies included in that index is a(n)

1 point

A) balance fund

B) growth fund

C) global fund

D) index fund

Clear selection

86) A mutual fund that invests in a mixture of stocks and bonds to minimize risk is the

1 point

A) global fund

B) callable fund

C) balance fund

D) index fund

Clear selection

87) A bond issue has been passed to build a new high school. Individuals who purchase bonds for this project will earn

1 point

A) interest on their investment

B) commission on their investment

C) a tax break on their investment

D) dividends on their investment

Clear selection

71) Mutual funds that sell shares to individuals and invest the proceeds in the stock market are

1 point

A) global funds

B) stock mutual funds

C) growth funds

D) bond mutual funds

Clear selection

89) ___ are direct obligations of the U.S. government that pay semi-annual interest and have 10-30 year maturities.

1 point

A) T-bills

B) Debenture bonds

C) T-bonds

D) T-notes

Clear selection

98) An illegal and unethical practice engaged in by a broker to increase commissions by causing excessive trading clients’ accounts is called

1 point

A) high balling

B) odd lot

C) churning

D) averages

Clear selection

78) Investment transaction costs include all of the following except

1 point

A) commissions

B) bid ask spread

C) hidden costs

D) Interest

Clear selection

PASSWORD *

88) A short-term debt security issued most commonly by the federal government is a

1 point

A) mutual fund

B) treasury bill

C) savings bond

D) treasury bond

Clear selection

72) The percentage of money earned on an investment in one year is the

1 point

A) interest rate

B) yield

C) annual rate of return

D) dividend earnings

Clear selection

76) The sales fee paid when purchasing a mutual fund through a broker is the

1 point

A) load

B) brokerage earnings

C) administrative fee

D) end fee

Clear selection

53) Stocks in corporations that reinvest their profits into the business so that it can grow are

1 point

A) speculative stocks

B) growth stocks

C) common stocks

D) income stocks

Clear selection

62) The process by which investment earnings build up not only on the money originally invested but also on the earnings and gains made in previous years is

1 point

A) inflating

B) return

C) compounding

D) simple interest

Clear selection

66) A legal partnership through which a group of investors are bound to a specified organizational structure, operating procedures, and purpose, which is typically to earn favorable long-term returns from moderate-risk investments is the

1 point

A) stock market

B) over-the-counter market

C) investment club

D) limited partnership

Clear selection

63) Shares in a company whose earnings are expected to grow at an above-average rate relative to the market represent a

1 point

A) growth company

B) defensive company

C) high risk company

D) conservative company

Clear selection

68) The highest point in the business cycle is the

1 point

A) trough

B) expansion

C) contraction

D) peak

Clear selection

67) The _____ measures the total output of the American economy.

1 point

A) Consumer Price Index

B) Real Estate Mortgage Investment Conduit

C) Collateral Mortgage Operation

D) Gross Domestic Product

Clear selection

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