QUESTION Which of the following gives an investor a portion of ownership in the issuer of a security? A) U.S. Treasury bond B) bank certificate of deposit C) stock D) secured corporate bond E) municipal bond ANSWER Answer: C Explanation: C) Stocks represent shares of ownership in a company.
Date: September 3rd, 2020
QUESTION Blue-chip stocks usually pay investors regular dividends. Indicate whether the statement is true or false. ANSWER Answer: TRUE Explanation: Blue-chip stocks are issued by big, reputable companies and usually pay regular dividends. They can be common stock or preferred stock.
Date: September 3rd, 2020
QUESTION A town issues $15 million in bonds to pay for construction of a new high school. The bonds will mature over 20 years, but the town will begin paying off a portion of the bonds annually after 15 years. What type of bonds are being used to help finance the school construction? A) callable […]
Date: September 3rd, 2020
QUESTION An investment bank buys the first issue of stock from XYZ Company at $35 per share. As XYZ’s shares are sold on the secondary securities market, the price falls to $28 a share. Which of the following describes the outcome of this dynamic? A) The investment bank sells the shares back to XYZ Company […]
Date: September 3rd, 2020
QUESTION Which of the following is considered an institutional investor on the securities market? A) Goldman Sachs B) Charles Schwab C) E-Trade D) Liberty Mutual Insurance E) U.S. Treasury ANSWER Answer: D Explanation: D) Institutional investors are large and powerful organizations, such as pension funds and insurance companies, that invest their own or others’ […]
Date: September 3rd, 2020
QUESTION The market for stocks progresses through a series of steps. Which step comes last in the process? A) Investment banks buy stocks. B) Corporations issue stocks. C) Investment banks form a syndicate. D) Investors sell stocks on an exchange. E) Investment banks sell stocks. ANSWER Answer: D Explanation: D) After investment banks sell […]
Date: September 3rd, 2020
QUESTION Marco bought 100 shares of Xtreem Energy Drink stock at $75 per share. One year later the stock price is $87, and Marco is content to watch his investment grow. Which of the following statements is true? A) Marco has earned a capital gain of $1,200. B) Marco has earned a capital gain of […]
Date: September 3rd, 2020
QUESTION Which of the following is sold to investors at weekly auctions? A) initial public offering stock issues B) long-term U.S. Treasury securities C) secondary securities D) short-term U.S. Treasury securities E) institutional investor stocks ANSWER Answer: D Explanation: D) Most securities sold through open auction are U.S. Treasury securities. Short-term securities are auctioned […]
Date: September 3rd, 2020
QUESTION Which of the following is NOT true of money market instruments? A) They are easily converted into cash. B) They are long-term investments. C) They are considered a very low-risk investment. D) They offer investors very low returns. E) They are conservative investments. ANSWER Answer: B Explanation: B) Money market instruments are debt […]
Date: September 3rd, 2020
QUESTION Martha recently won $10,000 on a scratch lottery ticket. She is 67 years old and wants to invest her windfall but avoid any risk of losing her money. Which of the following should Martha avoid? A) bank certificates of deposit B) U.S. Treasury notes C) investor-grade bonds D) corporate secured bonds E) speculative-grade bonds […]
Date: September 3rd, 2020
