QUESTION Which of the following, if true, weakens the argument of Domino Grace’s management? A) Competitors of Domino Grace have lured new customers by offering access to exotic new investment options. B) A new political administration is expected to pass new financial regulations affecting derivative investments. C) Derivative investments are similar to most investments in […]
QUESTION Which of the following, if true, might make the option more appealing to a prospect? A) In recent months, the stock market has become more bullish, making mutual funds a better bet. B) The firm pays the maintenance fees for the investments. C) Employees may choose the amount set aside each month, up to […]
QUESTION Douglas & Reynolds, an American financial firm, has recently fallen on hard times. Its CEO notes that the firm has lost money for three straight years. Over the same period, the euro has lost 15 percent of its value while the Chinese yuan has increased its value by 15 percent. He, therefore, concludes that […]
QUESTION Wall Street CEO: “Deregulation of the banking and financial industry in the 1990s and early 2000s would not have led to recession if it hadn’t been accompanied by the wide availability of cheap credit.” Which of the following, if true, weakens the CEO’s claim? A) Historical and worldwide studies have shown that deregulation accompanied […]
QUESTION In underwriting, investment bankers buy new issues of corporate stocks and bonds and resell them to the public. Indicate whether the statement is true or false. ANSWER Answer: TRUE Explanation: Most new issues of stocks and bonds are sold to the public through investment bankers.
QUESTION The secondary securities market is an auction where institutional investors buy U.S. Treasury securities. Indicate whether the statement is true or false. ANSWER Answer: FALSE Explanation: The secondary securities market is the financial market where existing stocks and bonds are bought and sold by investors. The original securities issuers are usually not involved.
QUESTION Mortgage pass-through securities are a safe investment in difficult economic conditions. Indicate whether the statement is true or false. ANSWER Answer: FALSE Explanation: Mortgage pass-through securities were once considered relatively safe investments. These securities were seriously impacted by the 2008 U.S. financial crisis and housing market collapse.
QUESTION With a market order, the broker has total decision-making authority over when to buy or sell a security for a client. Indicate whether the statement is true or false. ANSWER Answer: FALSE Explanation: In a market order, the broker is told to buy or sell a security at the best available price. These […]
QUESTION Placing a limit order with a broker is a good strategy for a volatile day of trading in the stock market. Indicate whether the statement is true or false. ANSWER Answer: TRUE Explanation: Limit orders tell a broker to buy a particular security only below a certain price or to sell only above […]
QUESTION Owners of preferred stock in a company get first claim to its dividends and assets but are not allowed to vote on major company decisions. Indicate whether the statement is true or false. ANSWER Answer: TRUE Explanation: Preferred stock owners cannot vote on company decisions but do get preferred, or first, claim on […]
