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
QUESTION Which of the following would NOT be included in the prospectus for a company’s stock? A) details about the company’s mission B) experience of the company’s top managers C) par value for shares D) past dividends E) call-in date for shares ANSWER Answer: E Explanation: E) Call-in dates are only established for callable […]
Date: September 3rd, 2020
QUESTION Which of the following is NOT a correctly paired association? A) sector fund—green energy B) balanced fund—stocks and bonds C) money market fund—common stock D) index fund—Wilshire 5000 E) income fund—dividends ANSWER Answer: C Explanation: C) Money market funds follow a very conservative investment strategy. They invest in bank CDs, commercial paper, and […]
Date: September 3rd, 2020
QUESTION What aspect of the brokerage firm operational model can benefit the broker at the expense of the client? A) Brokers can execute limit sell orders at higher than the stipulated order price and keep the difference. B) Brokers can utilize insider trading knowledge to manipulate client trades for their own benefit. C) Brokers can […]
Date: September 3rd, 2020
QUESTION Which of the following mutual fund types offers investors the lowest risk? A) index B) sector C) money market D) balanced E) socially responsible ANSWER Answer: C Explanation: C) Money market funds invest in bank CDs, U.S. Treasury bills, and commercial paper. Money market instruments are very conservative and considered extremely safe compared […]
Date: September 3rd, 2020
