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 […]
Date: September 3rd, 2020
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. […]
Date: September 3rd, 2020
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 […]
Date: September 3rd, 2020
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 […]
Date: September 3rd, 2020
QUESTION Why do investors believe that the S&P 500 offers a more accurate index of stock prices than the Dow? A) It lists more companies. B) It is a composite of U.S. and foreign stocks. C) It changes the stocks listed to represent economic trends. D) It lists stocks of all other U.S. stock market […]
Date: September 3rd, 2020
QUESTION Which industry sector is NOT represented in the Standard & Poor’s 500 index? A) financial B) industrial C) leisure and entertainment D) public utility E) transportation ANSWER Answer: C Explanation: C) The S&P 500 index tracks 400 industrial, 40 financial, 40 public utility, and 20 transportation stocks.
Date: September 3rd, 2020
QUESTION Sayed inherited a large sum of money and wants to spread his investment risk. He wants to focus on healthcare companies because it’s a high growth industry. He also prefers to have management fees deducted from his account rather than pay commissions on every purchase. What does Sayed invest in? A) an income load […]
Date: September 3rd, 2020
QUESTION What type of securities make up a hybrid mutual fund? A) common stock and preferred stock B) secured bonds and debenture bonds C) stocks and bonds D) alternative energy company and utility stocks E) convertible bonds ANSWER Answer: C Explanation: C) Hybrid funds include both stocks and bonds to help balance risk.
Date: September 3rd, 2020
QUESTION In recent years, the Dow Jones Industrial Average has replaced manufacturing companies listed in the index with pharmaceutical and technology companies. Why? A) to open the Dow to foreign companies B) to reflect change in the U.S. economy C) to add more companies selling preferred stock D) to enhance computation of the index E) […]
Date: September 3rd, 2020
QUESTION Umeko works in Manhattan, but a little bit of her heart will always be home in Japan. For her retirement plan, she selected a mutual fund that focuses on stocks from the Nikkei 225. What type of fund did Umeko invest in? A) global B) sector C) growth D) index E) socially responsible […]
Date: September 3rd, 2020
