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Exam 19: Using Securities Markets for Financing and Investing Opportunities

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Question 191

Multiple Choice

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A ________ certificate provides evidence of ownership in a specific corporation.

A) stock
B) bond
C) debt
D) capital

E) A) and B)
F) A) and C)

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Question 192

Multiple Choice

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Mutual fund investors will note that:

A) Fund managers have not yet added foreign securities into their funds.
B) Mutual funds cannot be purchased through a traditional brokerage house.
C) Loads can vary from one mutual fund to another.The fund manger dictates the commissions and fees.
D) By law,mutual funds can no longer charge loads.

E) A) and B)
F) A) and C)

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Question 193

Multiple Choice

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Which of the following securities are historically considered high quality and usually pay dividends?

The dollar amount assigned to shares of stock by the corporation's charter represents the stock's:

Stock market "circuit breakers" stop stock trading for a short time when the stock market experiences a significant drop in stock values.

After operating for years as a privately held corporation,MidAtlantic Ironworks plans to publicly trade its stock.As a midsized firm,MidAtlantic wants to avoid excessive paperwork,and the fear of being delisted in the future.The ________ provides the best fit for MidAtlantic's plans.

Discuss the role of investment bankers in the securities markets.

Explain the differences between preferred stock and common stock.

To reduce market volatility,________ require that a key computer is turned off so that program trading must be done 'by hand' rather than automatically by computer.

Buying on margin means you are borrowing part of the value of the stock purchase from the brokerage firm.

The risk/return tradeoff investors assume means:

Although you were not fortunate enough to get Chipper's Golf Resort stock [ticker symbol: CHPR] as an IPO,you are still thinking about trying to add some to your portfolio.Last week when you mentioned it to your broker,he said that there are plenty of shares trading on ____________,but,he wanted to send you the company's financial disclosures provided in the ______ before you finalize your decision.

The similarities between common stocks and bonds include a face or par value and a fixed rate of return for investors.

U.S.investors have invested $12 trillion in mutual funds.

Regis and Kathy plan to invest in corporate securities.While Regis plans to retire next year on his 65^th birthday,Kathy is celebrating her first job after college and her 22^nd birthday.Which of the two investors would be well advised to choose a more conservative investment strategy?

Which of the following securities provides the owner the right to vote for the corporate board of directors?

The advantage of using an online broker is that these services usually provide you with a wealth of information and help you allocate your assets.Sometimes they even help you create an investment plan for life!

The stock of well-known,high quality firms,such as Coca-Cola,General Electric,and Procter & Gamble,fit the characteristics of ________ stocks,because investors can almost always be assured a dividend and consistent stock price appreciation.

The NASDAQ is a floor-based exchange.

Cynthia plans to buy 100 shares of common stock in the Idaho Spud Corporation.She willingly accepts the risk of this investment because she: