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 […]
QUESTION Which of the following conclusions can be drawn most directly from the prompt? A) Female investors always use better judgment than male investors. B) Handling IPOs can be profitable for investment banks, but also risky. C) Technology-related stocks are likely to increase in value over the next decade. D) Young people are a good […]
QUESTION Which of the following, if true, most directly supports Brett’s position, that Olympic Daniels should purchase a large share of the Textmoor IPO? A) Textmoor’s tablet is designed to be significantly more efficient and versatile than its competitors’ products. B) Due to their high testosterone levels, males make more aggressive stock decisions than females. […]
