Question 1

Morningstar provides detailed financial information about corporate bonds.

Accepted Answer

A) True 
 B)False

Question 2

Adam contacts his account executive and tells him to purchase 500 shares of Intel stock immediately.Adam placed a ____ order with his account executive.

Accepted Answer

A)   Limit
B)   matched
C)   direct
D)   market
E)   stop-lossF) B) and C)
G) A) and C)

Question 3

The act that created the Securities and Exchange Commission was the

Accepted Answer

A)   Federal Securities Act of 1964.
B)   Maloney Act of 1938.
C)   Securities Act of 1933.
D)   Securities Exchange Act of 1934.
E)   Investment Company Act of 1938.F) All of the above
G) A) and D)

Question 4

At the beginning of the year, John Stewart invested €10,000.Twelve months later, John sold his investment for €11,000.Assuming he received no dividends or interest during this time, what is his rate of return?

Accepted Answer

A)   €11,000
B)   €10,000
C)   10 percent
D)   9 percent
E)   It is impossible to calculate rate of return with this information.F) A) and B)
G) C) and D)

Question 5

Which of the following investments is most liquid?

Accepted Answer

A)   Stocks
B)   Real estate
C)   Antique collectibles
D)   Corporate bonds
E)   Savings accountsF) A) and D)
G) None of the above

Question 6

Selling stock that an investor does not own and must replace later is called

Accepted Answer

A)   speculating.
B)   optioning.
C)   selling short.
D)   selling long.
E)   spot trading.F) A) and E)
G) A) and D)

Question 7

The net asset value per share is equal to the current market value of a mutual fund's portfolio minus the mutual fund's liabilities, divided by the number of outstanding shares.

Accepted Answer

A) True 
 B)False

Question 8

Lydia is interested in purchasing shares of a new energy company.She contracts her account executive who gives her advice about when to buy this stock and sends her a Mergent Investor Service report on the company.This account executive is most likely a(n)

Accepted Answer

A)   banker.
B)   energy executive.
C)   discount broker.
D)   comprehensive broker.
E)   full-service broker.F) A) and D)
G) C) and D)

Question 9

A security average is also known as

Accepted Answer

A)   a security index.
B)   a security margin.
C)   full disclosure.
D)   a margin requirement.
E)   an ETF.F) A) and B)
G) A) and C)

Question 10

Orlando Esperanza, president of Connell Corporation, requested that fifty shares of his Hewlett-Packard stock be sold at a price equal to or better than €30.Orlando placed a(n)  ____ order with his broker.

Accepted Answer

A)   Market
B)   Structured
C)   Account
D)   executive
E)   LimitF) B) and C)
G) A) and E)

Question 11

Frank Bart bought 100 shares of Home Depot for €46 a share.Later, he sold his 100 shares for €56 a share.Frank's profit is referred to as

Accepted Answer

A)   just plain luck.
B)   a margin profit.
C)   selling high.
D)   a capital gain.
E)   an SEC transaction.F) D) and E)
G) B) and D)

Question 12

The purpose of portfolio management is to increase both risk and returns.

Accepted Answer

A) True 
 B)False

Question 13

A charge made by an investment company to redeem shares in a mutual fund is called a

Accepted Answer

A)   load charge.
B)   low-load charge.
C)   management fee.
D)   net asset value fee.
E)   contingent deferred sales fee.F) A) and E)
G) A) and B)

Question 14

Over a long time period, real estate ownership represents one of the best hedges against inflation.

Accepted Answer

A) True 
 B)False

Question 15

The total return you receive on an investment over a specific period of time divided by the amount invested is referred to as the

Accepted Answer

A)   rate of investment.
B)   rate of return.
C)   current yield.
D)   yield to maturity.
E)   income return.F) None of the above
G) C) and E)

Question 16

According to Suze Orman, how much of Jackie Martin's portfolio should be invested in growth investments if she is 40 years old?

Accepted Answer

A)   33 percent
B)   40 percent
C)   50 percent
D)   70 percent
E)   90 percentF) All of the above
G) None of the above

Question 17

Selling short is a term used to describe a situation in which an investor is selling stock he or she does not own but has borrowed from a brokerage firm and will repay at a later date.

Accepted Answer

A) True 
 B)False

Question 18

To determine his net worth, Joe Gillian subtracts ____ from ____.

Accepted Answer

A)   liabilities; assets
B)   assets; liabilities
C)   expenses; income
D)   income; expenses
E)   assets; budgeted amountsF) A) and C)
G) All of the above

Question 19

Kelso Corporation declared a 10 percent stock dividend.John, one of the stockholders, has 100 shares.How many shares will John own after the stock dividend?

Accepted Answer

A)   110
B)   10
C)   1
D)   1,100
E)   90F) None of the above
G) A) and B)

Question 20

Investments in gemstones, precious metals, and collectibles are all considered

Accepted Answer

A)   low risk.
B)   highly profitable.
C)   estate investments.
D)   optioning.
E)   high risk.F) B) and D)
G) D) and E)

Exam 19: Personal Finances and Investments

Morningstar provides detailed financial information about corporate bonds.

Correct AnswerverifiedShow Answer

Orlando Esperanza, president of Connell Corporation, requested that fifty shares of his Hewlett-Packard stock be sold at a price equal to or better than €30.Orlando placed a(n) ____ order with his broker.

Correct AnswerverifiedShow Answer

Kelso Corporation declared a 10 percent stock dividend.John, one of the stockholders, has 100 shares.How many shares will John own after the stock dividend?

Correct AnswerverifiedShow Answer

The net asset value per share is equal to the current market value of a mutual fund's portfolio minus the mutual fund's liabilities, divided by the number of outstanding shares.

Correct AnswerverifiedShow Answer

Selling stock that an investor does not own and must replace later is called

Correct AnswerverifiedShow Answer

To determine his net worth, Joe Gillian subtracts ____ from ____.

Correct AnswerverifiedShow Answer

Lydia is interested in purchasing shares of a new energy company.She contracts her account executive who gives her advice about when to buy this stock and sends her a Mergent Investor Service report on the company.This account executive is most likely a(n)

Correct AnswerverifiedShow Answer

A security average is also known as

Correct AnswerverifiedShow Answer

According to Suze Orman, how much of Jackie Martin's portfolio should be invested in growth investments if she is 40 years old?

Correct AnswerverifiedShow Answer

Over a long time period, real estate ownership represents one of the best hedges against inflation.

Correct AnswerverifiedShow Answer

Investments in gemstones, precious metals, and collectibles are all considered

Correct AnswerverifiedShow Answer

Selling short is a term used to describe a situation in which an investor is selling stock he or she does not own but has borrowed from a brokerage firm and will repay at a later date.

Correct AnswerverifiedShow Answer

The total return you receive on an investment over a specific period of time divided by the amount invested is referred to as the

Correct AnswerverifiedShow Answer

The act that created the Securities and Exchange Commission was the

Correct AnswerverifiedShow Answer

A charge made by an investment company to redeem shares in a mutual fund is called a

Correct AnswerverifiedShow Answer

The purpose of portfolio management is to increase both risk and returns.

Correct AnswerverifiedShow Answer

Which of the following investments is most liquid?

Correct AnswerverifiedShow Answer

Frank Bart bought 100 shares of Home Depot for €46 a share.Later, he sold his 100 shares for €56 a share.Frank's profit is referred to as

Correct AnswerverifiedShow Answer

At the beginning of the year, John Stewart invested €10,000.Twelve months later, John sold his investment for €11,000.Assuming he received no dividends or interest during this time, what is his rate of return?

Correct AnswerverifiedShow Answer

Adam contacts his account executive and tells him to purchase 500 shares of Intel stock immediately.Adam placed a ____ order with his account executive.

Correct AnswerverifiedShow Answer

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To determine his net worth, Joe Gillian subtracts from .

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