QUESTION What type of mutual fund reflects an investment strategy focused on achieving the highest yield? A) growth B) income C) index D) specialty E) global ANSWER Answer: B Explanation: B) The strategy seeking to obtain the highest yield is investing for income. Income mutual funds invest in securities that pay high dividends and […]
QUESTION When placing an order regarding a particular security, what three points of information must be specified? What will be an ideal response? ANSWER Answer: 1. whether you want to buy or sell the security 2. how many shares to buy or sell 3. the conditions for the order Explanation: When placing an order […]
QUESTION Ron has entered the high-stakes world of commodities trading. On April 1, he signed a futures contract to buy 200 metric tons of soybeans on October 1 at $526 per metric ton. The current price is $485 per metric ton. What will the price be on October 1 for Ron to join the rarefied […]
QUESTION What is diversification from an investment perspective? What will be an ideal response? ANSWER Answer: Diversification is owning a variety of different securities types in an investment portfolio. Following this approach means that a serious decline in the value of a particular security will not have a dramatic impact on the entire portfolio. […]
QUESTION Which of the following lists investment strategies in order from lowest risk to highest risk? A) investing for growth < buying and holding < market timing < investing for income < value investing B) buying and holding < investing for income < investing for growth < value investing < market timing C) value investing […]
QUESTION When the U.S. housing market recovers after the Great Recession and homes are being built at a rapid pace, this will have a direct impact on the price of which commodity? A) gold B) coffee beans C) appliances D) lumber E) gasoline ANSWER Answer: D Explanation: D) In an economic expansion that is […]
QUESTION Which of the following would NOT be traded in a commodities exchange? A) eggs B) silicon chips C) soybean oil D) gold E) wool ANSWER Answer: B Explanation: B) Commodities are raw materials and agricultural goods used to produce other goods.
QUESTION Edna and Stan are both recently retired and need to reallocate their investments. Which of the following is the best portfolio mix to meet their needs? A) 75% growth stocks, 15% blue chip stocks, 10% bonds B) 50% growth stocks, 45% blue chip stocks, 5% cash C) 50% blue chip stocks, 25% bonds, 25% […]
QUESTION Which portfolio mix is following the most aggressive investment strategy? A) 85% stocks, 15% bonds, 0% cash B) 50% stocks, 40% bonds, 10% cash C) 40% stocks, 35% bonds, 15% cash D) 0% stocks, 80% bonds, 20% cash E) 25% stocks, 65% bonds, 10% cash ANSWER Answer: A Explanation: A) Stocks present much […]
QUESTION Oliver is a day trader who tries to earn fast profits by making many trades in a short amount of time. What investment strategy does Oliver follow? A) value investing B) market timing C) investing for growth D) buying and holding E) investing for income ANSWER Answer: B Explanation: B) Market timing consists […]
