Question 1

Debenture bonds represent bonds that are not secured by collateral.

Accepted Answer

A) True 
 B)False

Question 2

We calculate the mutual fund's NAV Net Asset Value)by dividing the total market value of the fund,by the number of shared outstanding.

Accepted Answer

A) True 
 B)False

Question 3

Which of the following represents a disadvantage of issuing bonds?

Accepted Answer

A)  Bonds are permanent debt on the firm's balance sheet.
B)  Dividends are legally required.
C)  Bonds increase the firm's debt.
D)  Bondholders receive voting rights.E) A) and B)
F) A) and C)

Question 4

Which of the following describes the process where an investor borrows a percentage of the purchase price of stocks from the brokerage firm?

Accepted Answer

A)  A margin call
B)  futures trading
C)  buying on margin
D)  dealer's account tradingE) B) and C)
F) B) and D)

Question 5

U.S.investors have invested $11 trillion in mutual funds.

Accepted Answer

A) True 
 B)False

Question 6

A U.S.government bond paying 3.25% interest annually is a lower risk than a Bellandro Bay Brewery bond paying 6%.

Accepted Answer

A) True 
 B)False

Question 7

A Bond's face value is the same as its:

Accepted Answer

A)  risk rating.
B)  principal.
C)  coupon value.
D)  yield.E) All of the above
F) A) and D)

Question 8

Dividends are paid out of a corporation's:

Accepted Answer

A)  Profit,before taxes.
B)  Profit,after taxes.
C)  Sales revenue.
D)  Capital contributed by bondholders.E) B) and C)
F) None of the above

Question 9

When Tong Su purchased 500 shares of preferred stock in the Vibrates Corporation,his certificate indicated the stock had a par value of $50 per share.This means that Tong Su:

Accepted Answer

A)  will never get less than $50 per share when selling his stock.
B)  has shares that are currently worth $50 per share.
C)  may receive dividends based on this value per share.
D)  must receive a $5 dividend each and every year.E) B) and C)
F) A) and C)

Question 10

Brokers prefer trading shares of a firm's stock in multiples of 100,known as:

Accepted Answer

A)  margin blocks.
B)  odd lots.
C)  round lots.
D)  market lots.E) B) and C)
F) B) and D)

Question 11

Index funds invest in one specific type of investment,for example,an index fund might only invest in income stocks,companies whose stocks pay dividends.

Accepted Answer

A) True 
 B)False

Question 12

Elaine plans to purchase 100 shares of Michigan International stock at $44 per share.The current margin rate is 40%.The maximum amount that Elaine could borrow from her broker is:

Accepted Answer

A)  $1,100.
B)  $1,760.
C)  $2,640.
D)  $4,400.E) A) and C)
F) A) and B)

Question 13

When you place a limit order,it means you are willing to buy or sell the stock at the best price available.

Accepted Answer

A) True 
 B)False

Question 14

An investment that pools together investors' money in order to buy securities in many different companies or governments is a ___________.

Accepted Answer

A)  commercial fund
B)  mutual fund
C)  holding company
D)  Public Investment CorporationE) A) and B)
F) A) and C)

Question 15

Bonds sold at a discount are sold for more than the bond's face value.

Accepted Answer

A) True 
 B)False

Question 16

The number of U.S.companies that are listed on foreign stock exchanges is declining.

Accepted Answer

A) True 
 B)False

Question 17

The cost of a firm borrowing money is called the:

Accepted Answer

A)  interest rate.
B)  dividend payment.
C)  prime charge.
D)  opportunity charge.E) None of the above
F) B) and D)

Question 18

U.S.government bonds are considered safe investments.Therefore such government bonds usually have a lower interest rate than corporate bonds.

Accepted Answer

A) True 
 B)False

Question 19

Mutual fund investors will note that:

Accepted Answer

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) B) and C)
F) None of the above

Question 20

If you are willing to hold on to your growth stock long enough,at least five years or more,you will realize capital gains.

Accepted Answer

A) True 
 B)False

Exam 19: Using Securities Markets for Financing and Investing Opportunities

U.S.investors have invested $11 trillion in mutual funds.

Correct AnswerverifiedShow Answer

We calculate the mutual fund's NAV Net Asset Value)by dividing the total market value of the fund,by the number of shared outstanding.

Correct AnswerverifiedShow Answer

The number of U.S.companies that are listed on foreign stock exchanges is declining.

Correct AnswerverifiedShow Answer

Dividends are paid out of a corporation's:

Correct AnswerverifiedShow Answer

When Tong Su purchased 500 shares of preferred stock in the Vibrates Corporation,his certificate indicated the stock had a par value of $50 per share.This means that Tong Su:

Correct AnswerverifiedShow Answer

An investment that pools together investors' money in order to buy securities in many different companies or governments is a ___________.

Correct AnswerverifiedShow Answer

Bonds sold at a discount are sold for more than the bond's face value.

Correct AnswerverifiedShow Answer

U.S.government bonds are considered safe investments.Therefore such government bonds usually have a lower interest rate than corporate bonds.

Correct AnswerverifiedShow Answer

Which of the following represents a disadvantage of issuing bonds?

Correct AnswerverifiedShow Answer

When you place a limit order,it means you are willing to buy or sell the stock at the best price available.

Correct AnswerverifiedShow Answer

A U.S.government bond paying 3.25% interest annually is a lower risk than a Bellandro Bay Brewery bond paying 6%.

Correct AnswerverifiedShow Answer

Brokers prefer trading shares of a firm's stock in multiples of 100,known as:

Correct AnswerverifiedShow Answer

Mutual fund investors will note that:

Correct AnswerverifiedShow Answer

The cost of a firm borrowing money is called the:

Correct AnswerverifiedShow Answer

Debenture bonds represent bonds that are not secured by collateral.

Correct AnswerverifiedShow Answer

Which of the following describes the process where an investor borrows a percentage of the purchase price of stocks from the brokerage firm?

Correct AnswerverifiedShow Answer

A Bond's face value is the same as its:

Correct AnswerverifiedShow Answer

Index funds invest in one specific type of investment,for example,an index fund might only invest in income stocks,companies whose stocks pay dividends.

Correct AnswerverifiedShow Answer

Elaine plans to purchase 100 shares of Michigan International stock at $44 per share.The current margin rate is 40%.The maximum amount that Elaine could borrow from her broker is:

Correct AnswerverifiedShow Answer

If you are willing to hold on to your growth stock long enough,at least five years or more,you will realize capital gains.

Correct AnswerverifiedShow Answer

Correct Answer
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