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The _____  is based on 500 different stocks.


A) Standard & Poor's index
B) Dow Jones Industrial Average
C) New York Stock Exchange index
D) Wall Street Commercial Average
E) NASDAQ

F) A) and B)
G) C) and D)

Correct Answer

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_____ are senior, unsecured, unsubordinated debt securities issued by an underwriting bank.


A) Mutual funds
B) Exchange traded notes
C) Corporate bonds
D) Collateral debt obligations
E) Treasury bills

F) C) and D)
G) A) and C)

Correct Answer

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Diversification of investment securities increases risk.

A) True
B) False

Correct Answer

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Discount brokers will:


A) charge low commissions.
B) give a commission to the investment bankers.
C) issue a prospectus of the new issue in the primary market.
D) provide finances to underwrite the shares issued for the first time.
E) maintain a minimum balance of unsold shares of loss-making corporations.

F) A) and B)
G) B) and D)

Correct Answer

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A bull market is characterized by:


A) investor optimism.
B) low returns.
C) economic slowdown.
D) falling stock prices.
E) lack of growth.

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

Correct Answer

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_____  is one of the most frequent investment objectives of an individual.


A) Exceeding the credit limit
B) Obtaining a loan
C) Paying more taxes
D) Enhancing current income
E) Business expansion

F) C) and D)
G) A) and B)

Correct Answer

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Common stocks are liabilities.

A) True
B) False

Correct Answer

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A convertible bond would let the investor exchange it for:


A) common stock.
B) preferred stock.
C) a mutual fund.
D) an exchange traded fund.
E) an exchange traded note.

F) D) and E)
G) A) and B)

Correct Answer

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Subscription advisory services provide information and recommendations on various industries and specific securities.

A) True
B) False

Correct Answer

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A corporation's annual stockholders' report provides financial data and other information related to both past and planned activities.

A) True
B) False

Correct Answer

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The Dow Jones Industrial Average is based on:


A) 50 stocks.
B) 30 stocks.
C) 500 stocks.
D) 200 stocks.
E) 100 stocks.

F) B) and E)
G) B) and D)

Correct Answer

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Reallocation of the assets in a portfolio is called rebalancing.

A) True
B) False

Correct Answer

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Which of the following is an order to sell a stock when the market price drops to or below a specified level?


A) A market order
B) A limit order
C) A stop-loss order
D) A fill or kill order
E) A day order

F) A) and D)
G) B) and D)

Correct Answer

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The Securities Investor Protection Corporation (SIPC) provides insurance to protect the investor from:


A) declining security prices.
B) the company's failure to make dividend payments.
C) a brokerage firm's financial failure.
D) the loss of the marginal investment on the stock exchange.
E) the loss of the security deposit with the broker.

F) A) and E)
G) None of the above

Correct Answer

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A fixed dividend would be received with :


A) common stocks.
B) preferred stocks.
C) bonds.
D) insurance policies.
E) real estate investments.

F) A) and B)
G) B) and E)

Correct Answer

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Your goals tend to set the tone for your investment program, and they play a major role in determining how conservative or aggressive you're likely to be in making investment decisions.

A) True
B) False

Correct Answer

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Monte wants to save for his daughter's college education. He would like to have $85,000 in 15 years. If Monte can earn an average of 8.5% on this fund, how much would he need to deposit in the account today to meet his goal?  If Monte has $5,000 set aside now and  can earn an average of 8.5% on this fund, how much would he need to add to the account each month? (Round to the nearest whole number.)

Correct Answer

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Using a financial calculator, Monte has ...

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Maria has invested $200,000 in mutual funds and $20,000 in bonds. The total value of her portfolio is:


A) $220,000.
B) $130,000.
C) $250,000.
D) $400,000.
E) $310,000.

F) A) and D)
G) D) and E)

Correct Answer

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A collection of securities assembled to meet common investment goals is called a(n) :


A) treasury.
B) diversification.
C) grouping.
D) envelope.
E) portfolio.

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

Correct Answer

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The owner of a bond would expect to receive _____ annual income.


A) an increasing
B) a steady
C) a decreasing
D) an erratic
E) no

F) B) and C)
G) C) and D)

Correct Answer

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