Question 1

An individual who pays a sales charge every time he or she purchases shares in a mutual fund is investing in a(n)  ____ fund.

Accepted Answer

A)   closed-end
B)   no-load
C)   Income
D)   open-end
E)   LoadF) A) and C)
G) B) and E)

Question 2

The practice of board members, corporate management, and employees buying and selling a corporation's stock is

Accepted Answer

A)   corporate manipulation.
B)   management investment trading.
C)   SEC trading.
D)   insider trading.
E)   illegal trading.F) A) and E)
G) A) and D)

Question 3

The board of directors of Dean Foods declares that owners of its stock will now have three times as many shares.This is called a

Accepted Answer

A)   30 percent stock dividend.
B)   three-for-one stock split.
C)   two-for-one stock split.
D)   300 percent stock dividend.
E)   stock price revaluation.F) A) and E)
G) C) and D)

Question 4

A blue-chip stock is an investment that generally attracts a high-risk or speculative investor.

Accepted Answer

A) True 
 B)False

Question 5

If the value of a stock you bought on margin decreases to approximately 60 percent of its original price, you will receive a margin call from the brokerage firm.

Accepted Answer

A) True 
 B)False

Question 6

Which of the following is not a characteristic of ordinary share?

Accepted Answer

A)   Shares can be sold for a capital gain if the price of the stock increases.
B)   The firm has no legal obligation to pay dividends to stockholders.
C)   An increase or decrease in the market value of the stock will have a corresponding effect on the value of the investment.
D)   Each share of stock represents debt for the corporation.
E)   Cash dividends are generally paid on a quarterly basis.F) B) and E)
G) A) and B)

Question 7

A corporate bond with a face value of €1,000 quoted at 100 is selling for

Accepted Answer

A)   €1.
B)   €10.
C)   €1,000.
D)   €10,000.
E)   €100.F) C) and D)
G) D) and E)

Question 8

Which of the following describes why exchange-traded funds have less need for a portfolio manager than closed-end funds?

Accepted Answer

A)   ETFs normally invest in stocks, bonds, or securities within a specific index.
B)   ETFs are actively managed.
C)   ETFs have portfolio managers that actively select stocks and other securities on a regular basis.
D)   ETF fees are generally higher.
E)   ETFs usually hold investments in a minimum of three indexes.F) B) and E)
G) A) and E)

Question 9

Which of the following statements is most in keeping with investment counselors' suggestions for investment goals?

Accepted Answer

A)   By January 2015, I will have total assets of €180,000.
B)   I want to invest to earn money with money.
C)   In twenty years or so, I want to have €10,000 in a bank account.
D)   I want to invest in stock that is growing.
E)   By December 2014 or 2015, I want to hold stocks in a Fortune 500 company.F) C) and D)
G) A) and E)

Question 10

The type of investment that combines and invests the funds of many individual investors under the guidance of professional managers is called a(n)

Accepted Answer

A)   NOW account.
B)   securities exchange.
C)   prospectus.
D)   mutual fund.
E)   option fund.F) B) and D)
G) A) and D)

Question 11

Instead of paying dividends to their stockholders, growing corporations typically

Accepted Answer

A)   pay bonuses to their stockholders.
B)   sell more stock to the public.
C)   pay back their bank loans more quickly.
D)   reinvest profits in the business.
E)   provide steady income to their investors.F) B) and D)
G) All of the above

Question 12

An investor who buys stock with the anticipation of an increase in value and a chance to sell at a profit is

Accepted Answer

A)   selling short.
B)   using leverage.
C)   spot trading.
D)   optioning.
E)   buying long.F) D) and E)
G) A) and C)

Question 13

A government security that is sold in minimum units of €100 and has maturities that may be as long as one year is a

Accepted Answer

A)   Series EE savings bond.
B)   Savings bond.
C)   Treasury bond.
D)   Treasury note.
E)   Treasury bill.F) A) and E)
G) B) and C)

Question 14

What are the three ways that individuals can make money by buying ordinary share?

Accepted Answer

A)   Through an increase in the value of the stock, dividend payments, and stock splits.
B)   Through stock splits, stock exchanges, and cash dividends.
C)   Through dividends, increasing stock value, and conversion to bonds.
D)   Through stock splits, stock buys, and dividends.
E)   Through stock price appreciation, stock conversions, and stock dividends.F) A) and D)
G) C) and D)

Question 15

If a bond were listed at 84, its price would be €84.00.

Accepted Answer

A) True 
 B)False

Question 16

Pro-future, Inc.
Sandy is a personal financial planner at Pro-future, Inc.Pro-future is a financial company that focuses on personal and business financing.When potential customers come to Sandy for financial advice, she first determines their investment goals in order to create a financial plan that fits their needs.Once she has created a suitable financial plan for a customer, Sandy gives her clients a pamphlet with suggestions for helping to accumulate the amount of money that they need.
Advice about risk is given to all of Sandy's clients.Sandy also makes strategic financial plans for each of her customers, which helps them to track and achieve their financial goals.
-Refer to Pro-future, Inc.Why would Sandy consider risk to be a good thing?

Accepted Answer

A)   The higher the risk, the larger the possible return.
B)   The higher the risk, the lower the possible investment.
C)   The lower the risk, the larger the possible return.
D)   The higher the risk, the higher the rate of investment.
E)   The lower the risk, the lower the rate of investment.F) C) and E)
G) C) and D)

Question 17

What are the most conservative of all investments?

Accepted Answer

A)   Mattresses
B)   Bank accounts
C)   Ordinary shares
D)   Corporate bonds
E)   Mutual fundsF) C) and E)
G) A) and B)

Question 18

Haverting, Inc., is a fast-growing biotech company.What is Haverting likely to do with any profits it generates?

Accepted Answer

A)   Pay them out to stockholders as dividends
B)   Invest them in the stock of other companies
C)   Reinvest them in Haverting to finance growth
D)   Keep half and pay the rest to stockholders
E)   Use the money to reduce corporate debtF) A) and E)
G) All of the above

Question 19

Real estate is a great investment as property values always increase.

Accepted Answer

A) True 
 B)False

Question 20

Which of the following is true about using the services of an account executive?

Accepted Answer

A)   Goals should be clearly communicated to an account executive.
B)   Account executives do not using churning practices.
C)   Account executives are usually liable for client losses.
D)   All account executives are full-service brokers.
E)   A full service account executive does not provide research materials to clients.F) C) and E)
G) C) and D)

Exam 19: Personal Finances and Investments

The type of investment that combines and invests the funds of many individual investors under the guidance of professional managers is called a(n)

Correct Answer
verified

Haverting, Inc., is a fast-growing biotech company.What is Haverting likely to do with any profits it generates?

Correct Answer
verified

Instead of paying dividends to their stockholders, growing corporations typically

Correct Answer
verified

An investor who buys stock with the anticipation of an increase in value and a chance to sell at a profit is

Correct Answer
verified

What are the most conservative of all investments?

Correct Answer
verified

A corporate bond with a face value of €1,000 quoted at 100 is selling for

Correct Answer
verified

Which of the following describes why exchange-traded funds have less need for a portfolio manager than closed-end funds?

Correct Answer
verified

A government security that is sold in minimum units of €100 and has maturities that may be as long as one year is a

Correct Answer
verified

Which of the following is true about using the services of an account executive?

Correct Answer
verified

Which of the following statements is most in keeping with investment counselors' suggestions for investment goals?

Correct Answer
verified

An individual who pays a sales charge every time he or she purchases shares in a mutual fund is investing in a(n) ____ fund.

Correct Answer
verified

What are the three ways that individuals can make money by buying ordinary share?

Correct Answer
verified

The board of directors of Dean Foods declares that owners of its stock will now have three times as many shares.This is called a

Correct Answer
verified

Correct Answer
verified

If the value of a stock you bought on margin decreases to approximately 60 percent of its original price, you will receive a margin call from the brokerage firm.

Correct Answer
verified

Which of the following is not a characteristic of ordinary share?

Correct Answer
verified

The practice of board members, corporate management, and employees buying and selling a corporation's stock is

Correct Answer
verified

If a bond were listed at 84, its price would be €84.00.

Correct Answer
verified

A blue-chip stock is an investment that generally attracts a high-risk or speculative investor.

Correct Answer
verified

Real estate is a great investment as property values always increase.

Correct Answer
verified

Exam 19: Personal Finances and Investments

The type of investment that combines and invests the funds of many individual investors under the guidance of professional managers is called a(n)

Correct AnswerverifiedShow Answer

Haverting, Inc., is a fast-growing biotech company.What is Haverting likely to do with any profits it generates?

Correct AnswerverifiedShow Answer

Instead of paying dividends to their stockholders, growing corporations typically

Correct AnswerverifiedShow Answer

An investor who buys stock with the anticipation of an increase in value and a chance to sell at a profit is

Correct AnswerverifiedShow Answer

What are the most conservative of all investments?

Correct AnswerverifiedShow Answer

A corporate bond with a face value of €1,000 quoted at 100 is selling for

Correct AnswerverifiedShow Answer

Which of the following describes why exchange-traded funds have less need for a portfolio manager than closed-end funds?

Correct AnswerverifiedShow Answer

A government security that is sold in minimum units of €100 and has maturities that may be as long as one year is a

Correct AnswerverifiedShow Answer

Which of the following is true about using the services of an account executive?

Correct AnswerverifiedShow Answer

Which of the following statements is most in keeping with investment counselors' suggestions for investment goals?

Correct AnswerverifiedShow Answer

An individual who pays a sales charge every time he or she purchases shares in a mutual fund is investing in a(n) ____ fund.

Correct AnswerverifiedShow Answer

What are the three ways that individuals can make money by buying ordinary share?

Correct AnswerverifiedShow Answer

The board of directors of Dean Foods declares that owners of its stock will now have three times as many shares.This is called a

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

If the value of a stock you bought on margin decreases to approximately 60 percent of its original price, you will receive a margin call from the brokerage firm.

Correct AnswerverifiedShow Answer

Which of the following is not a characteristic of ordinary share?

Correct AnswerverifiedShow Answer

The practice of board members, corporate management, and employees buying and selling a corporation's stock is

Correct AnswerverifiedShow Answer

If a bond were listed at 84, its price would be €84.00.

Correct AnswerverifiedShow Answer

A blue-chip stock is an investment that generally attracts a high-risk or speculative investor.

Correct AnswerverifiedShow Answer

Real estate is a great investment as property values always increase.

Correct AnswerverifiedShow Answer

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