QUESTION What type of securities order condition demonstrates the highest degree of faith in a broker’s capabilities? What will be an ideal response? ANSWER Answer: A discretionary order allows a broker to decide the best time and price for selling or buying a security. A client who places a discretionary order trusts the broker […]
QUESTION Which of the following, if true, most clearly weakens Karola’s point of view? A) People who use discount brokers often purchase stocks, which carry a greater risk than bonds or money market instruments. B) The department manager for whom the two work recently made several thousand dollars on an investment made through E-Trade. C) […]
QUESTION By what formula are the financial earnings of a mutual fund distributed to its investors? What will be an ideal response? ANSWER Answer: Investors in a mutual fund share in the returns according to the proportion of their contributions to the fund. Explanation: Investors share in the returns of a mutual fund in […]
QUESTION Which of the following, if true, most clearly strengthens Karola’s point of view? A) E-Trade is somewhat quicker than Merrill Lynch in putting in orders. B) Several other managers in the same firm use E-Trade and are satisfied with the quality of the investments they make. C) E-Trade offers online chats with an experienced […]
QUESTION Which of the following, if true, most directly supports Latisha’s position, that handling the Textmoor IPO could be risky for the bank? A) Several other tablets are already being sold by major companies in the competitive tablet market. B) Olympic Daniels failed to sell all the shares of the last IPO it handled, taking […]
QUESTION How is the concept of time important to commodities trading? What will be an ideal response? ANSWER Answer: Commodities trading is very future-oriented. Futures contracts are a main element of this process. In these contracts, the trader agrees to buy a specific amount of a commodity at a certain price at a certain […]
QUESTION Which allows an investor to practice the theory of a security limit order: a mutual fund or an exchange-traded fund? Explain why. What will be an ideal response? ANSWER Answer: Exchange-traded funds can be sold throughout the day, so they allow investors to buy or sell ETF shares when they reach a specified […]
QUESTION Devonte recently started his first job after college and knows he should be thinking about saving for retirement. What type of investment strategy is best for his goals? What will be an ideal response? ANSWER Answer: Buying and holding investments is a good strategy for people investing for the long term and people […]
QUESTION Investment strategies are all based on balancing what two concepts? What will be an ideal response? ANSWER Answer: Every investment strategy seeks to successfully balance the potential risks of particular investments against the possible returns that can be gained from the investment. Explanation: Investing is all about risks and returns. An aggressive mutual […]
QUESTION What type of stock prices tend to be more volatile, and why? What will be an ideal response? ANSWER Answer: Prices for growth stocks are more volatile. These are usually for small, innovative new companies in hot industries with a lot of change and uncertainty. Explanation: Growth stocks prices tend to be more […]
