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 […]
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 […]
QUESTION Marta has an extensive securities portfolio and has been working with the same full-service broker for over ten years. Based on this relationship, what type of security orders would Marta place? A) discretionary order B) secured order C) limit order D) market order E) indexed order ANSWER Answer: A Explanation: A) Given Marta’s […]
QUESTION After 36 years with the same engineering firm, Leonard retired last month. After making sure his investments grew to a substantial nest egg, now he needs to shift strategies so his savings provide living expenses. What type of fund should Leonard shift his retirement money into? A) money market B) balanced C) index D) […]
QUESTION Marshall wants to earn a regular income from stock investments to supplement his salary. Which of the following should he focus on in his research before buying any stocks? A) book value B) dividends C) stock splits D) par value E) market value ANSWER Answer: B Explanation: B) Dividends are part of a […]
QUESTION Urvashi owns 10 shares of Kloud Komputing stock, with a market value of $500 per share. The company issues a 2-for-1 stock split. After the split, what is the total value of Urvashi’s stake in Kloud Komputing? A) $10,000 B) $2,500 C) $5,000 D) $1,000 E) $20,000 ANSWER Answer: C Explanation: C) In […]
QUESTION A biotech company is planning to build a new manufacturing plant. The board is weighing the advantages and disadvantages of going public and issuing stock to raise funds. Which of the following does NOT describe a factor of this stock issue? A) The company avoids incurring additional debt by issuing stock. B) The company […]
QUESTION What is the world’s largest stock exchange? A) NASDAQ B) American Stock Exchange C) over-the-counter market D) New York Stock Exchange E) Boston Stock Exchange ANSWER Answer: D Explanation: D) The NYSE was established in 1792 and accounts for about 45 percent of all stock trading done in the United States.
QUESTION Which of the following is NOT true of a stock exchange? A) It can execute stock trades via brokers on a trading floor. B) It can sell stocks issued directly from corporations. C) It can link buyers and sellers of stock directly. D) It can focus on trading stock of particular types of companies. […]
QUESTION Gloria likes to be able to vote on major issues that are being considered by companies she invests in. What type of securities should Gloria buy? A) secured bonds B) preferred stock C) callable bonds D) common stock E) convertible bonds ANSWER Answer: D Explanation: D) With common stock, stockholders are able to […]
