Question 1

The act that is sometimes referred to as the Truth in Securities Act is 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 1940.F) A) and D)
G) A) and B)

Question 2

A 12b-1 fee is

Accepted Answer

A)   between 0.10 and 0.25 percent.
B)   between 0.25 and 0.50 percent.
C)   between 0.50 and 0.75 percent.
D)   cannot exceed 1 percent.
E)   generally more than 2 percent.F) B) and D)
G) B) and C)

Question 3

A bond issued by a state or local government is called a(n)

Accepted Answer

A)   state treasury note.
B)   state treasury bond.
C)   exempt bond.
D)   municipal bond.
E)   zero-coupon bond.F) C) and E)
G) A) and E)

Question 4

Generally, small cash dividends or no dividends are received from an investment in a corporation that is in the process of growing.

Accepted Answer

A) True 
 B)False

Question 5

Which of the following would most likely be classified as a traditional investment?

Accepted Answer

A)   Ordinary share issued by new corporations
B)   Mutual funds
C)   Corporate bonds
D)   Market order
E)   Savings accountF) A) and B)
G) A) and C)

Question 6

Pro-future, Inc.
Sandy is a personal financial planner at Pro-future, Inc.Pro-future is a financial company that focuses on personal and business financing.When potential customers come to Sandy for financial advice, she first determines their investment goals in order to create a financial plan that fits their needs.Once she has created a suitable financial plan for a customer, Sandy gives her clients a pamphlet with suggestions for helping to accumulate the amount of money that they need.
Advice about risk is given to all of Sandy's clients.Sandy also makes strategic financial plans for each of her customers, which helps them to track and achieve their financial goals.
-Refer to Pro-future, Inc.Which of the following best describes a financial planner like Sandy?

Accepted Answer

A)   A person who has had at least two years of training in investments, insurance, taxation, retirement planning, and estate planning and has passed a rigorous examination
B)   A person who has passed a national but not state examination
C)   A person who has had at least six months of training in investments, insurance, taxation, retirement planning, and estate planning
D)   A person who has had at least five years of training in investments, insurance, taxation, retirement planning, and estate planning, and has graduated from high school
E)   A person who has a college degree in planningF) A) and B)
G) A) and C)

Question 7

When Kathy Wright completed her training, she expected to be given a stockbroker's position.Instead, she is an account executive.This is a better descriptive term than stockbroker because she actually buys and sells all types of securities, not just stock.

Accepted Answer

A) True 
 B)False

Question 8

An investor who is trying to make a large return on his or her investment in a short time span would most likely be engaged in

Accepted Answer

A)   diversification.
B)   hedging.
C)   a high-risk investment.
D)   optioning.
E)   None of these answers is correct.F) A) and B)
G) None of the above

Question 9

What would cause a corporate bond with a €1,000 face value and a fixed interest rate of 7 percent to increase in value?

Accepted Answer

A)   The bond receives a lower rating by Moody's or Standard & Poor's.
B)   Overall interest rates in the economy increase.
C)   The government places an interest ceiling on corporate bonds.
D)   Overall interest rates in the economy decrease.
E)   The corporation files for protection under the bankruptcy laws.F) None of the above
G) A) and B)

Question 10

A ____ of funds exists when one investment company manages a group of mutual funds.

Accepted Answer

A)   balance
B)   conglomerate
C)   collage
D)   collection
E)   FamilyF) B) and E)
G) A) and B)

Question 11

For an investor, liquidity can be defined as the ease with which an investment can be converted into cash.

Accepted Answer

A) True 
 B)False

Question 12

Corporate bonds are a form of

Accepted Answer

A)   short-term debt financing.
B)   bank account.
C)   long-term equity financing.
D)   long-term debt financing.
E)   short-term equity financing.F) A) and B)
G) A) and D)

Question 13

Kimberly has often invested in new biotechnology firms.She receives a booklet in the mail that contains a detailed description of a new security, the issuing biotech firm, and descriptive biographies of the firm's top managers and their experience.Kimberly received a(n)

Accepted Answer

A)   annual report.
B)   investor service report.
C)   stock quotation report.
D)   prospectus.
E)   quarterly report.F) A) and C)
G) B) and E)

Question 14

Robert has been saving his money and decides he wants to invest it.Which of the following is considered the most speculative?

Accepted Answer

A)   A bank account
B)   Corporate bonds
C)   Real estate
D)   Derivatives
E)   Preferred stockF) B) and E)
G) A) and E)

Question 15

If Mondell Barnett purchases stock valued at €10,000 and is charged 1 percent commission, what is the total amount he must pay the brokerage firm?

Accepted Answer

A)   €100
B)   €9,900
C)   €10,000
D)   €10,100
E)   It is impossible to tell given the above information.F) A) and E)
G) D) and E)

Question 16

To make a profit from a short transaction, the investor must do all of the following except

Accepted Answer

A)   borrow a specific number of a company's shares of stock from a broker.
B)   obtain financing from a bank.
C)   sell the borrowed stock immediately.
D)   buy an equal number of shares as soon as the price drops.
E)   repay the borrowed stock with the newly purchased shares.F) A) and D)
G) C) and D)

Question 17

Sira Barker has a monthly income of €2,800.Her monthly expenses total €2,200.Based on this information, she has

Accepted Answer

A)   a cash deficit of €2,800.
B)   a cash surplus of €2,200.
C)   assets that total €600.
D)   liabilities that total €2,200.
E)   a cash surplus of €600.F) A) and D)
G) A) and C)

Question 18

A government security that is sold in €100 units with a maturity of more than one year but not more than ten years is a

Accepted Answer

A)   Series EE savings bond.
B)   Savings bond.
C)   Treasury bond.
D)   Treasury note.
E)   Treasury bill.F) C) and D)
G) None of the above

Question 19

In order to reach goals of high returns on your investments, what must you generally give up?

Accepted Answer

A)   Risk
B)   Safety
C)   Stocks
D)   Money
E)   ReturnF) A) and B)
G) C) and D)

Question 20

Interest payments on corporate bonds are usually paid

Accepted Answer

A)   every month.
B)   every quarter.
C)   every six months.
D)   every year.
E)   when the bond matures.F) B) and C)
G) A) and B)

Exam 19: Personal Finances and Investments

Which of the following would most likely be classified as a traditional investment?

Correct Answer
verified

Kimberly has often invested in new biotechnology firms.She receives a booklet in the mail that contains a detailed description of a new security, the issuing biotech firm, and descriptive biographies of the firm's top managers and their experience.Kimberly received a(n)

Correct Answer
verified

Sira Barker has a monthly income of €2,800.Her monthly expenses total €2,200.Based on this information, she has

Correct Answer
verified

For an investor, liquidity can be defined as the ease with which an investment can be converted into cash.

Correct Answer
verified

If Mondell Barnett purchases stock valued at €10,000 and is charged 1 percent commission, what is the total amount he must pay the brokerage firm?

Correct Answer
verified

The act that is sometimes referred to as the Truth in Securities Act is the

Correct Answer
verified

To make a profit from a short transaction, the investor must do all of the following except

Correct Answer
verified

Generally, small cash dividends or no dividends are received from an investment in a corporation that is in the process of growing.

Correct Answer
verified

An investor who is trying to make a large return on his or her investment in a short time span would most likely be engaged in

Correct Answer
verified

A bond issued by a state or local government is called a(n)

Correct Answer
verified

What would cause a corporate bond with a €1,000 face value and a fixed interest rate of 7 percent to increase in value?

Correct Answer
verified

In order to reach goals of high returns on your investments, what must you generally give up?

Correct Answer
verified

A government security that is sold in €100 units with a maturity of more than one year but not more than ten years is a

Correct Answer
verified

A ____ of funds exists when one investment company manages a group of mutual funds.

Correct Answer
verified

A 12b-1 fee is

Correct Answer
verified

Interest payments on corporate bonds are usually paid

Correct Answer
verified

Corporate bonds are a form of

Correct Answer
verified

Robert has been saving his money and decides he wants to invest it.Which of the following is considered the most speculative?

Correct Answer
verified

Correct Answer
verified

When Kathy Wright completed her training, she expected to be given a stockbroker's position.Instead, she is an account executive.This is a better descriptive term than stockbroker because she actually buys and sells all types of securities, not just stock.

Correct Answer
verified

Exam 19: Personal Finances and Investments

Which of the following would most likely be classified as a traditional investment?

Correct AnswerverifiedShow Answer

Kimberly has often invested in new biotechnology firms.She receives a booklet in the mail that contains a detailed description of a new security, the issuing biotech firm, and descriptive biographies of the firm's top managers and their experience.Kimberly received a(n)

Correct AnswerverifiedShow Answer

Sira Barker has a monthly income of €2,800.Her monthly expenses total €2,200.Based on this information, she has

Correct AnswerverifiedShow Answer

For an investor, liquidity can be defined as the ease with which an investment can be converted into cash.

Correct AnswerverifiedShow Answer

If Mondell Barnett purchases stock valued at €10,000 and is charged 1 percent commission, what is the total amount he must pay the brokerage firm?

Correct AnswerverifiedShow Answer

The act that is sometimes referred to as the Truth in Securities Act is the

Correct AnswerverifiedShow Answer

To make a profit from a short transaction, the investor must do all of the following except

Correct AnswerverifiedShow Answer

Generally, small cash dividends or no dividends are received from an investment in a corporation that is in the process of growing.

Correct AnswerverifiedShow Answer

An investor who is trying to make a large return on his or her investment in a short time span would most likely be engaged in

Correct AnswerverifiedShow Answer

A bond issued by a state or local government is called a(n)

Correct AnswerverifiedShow Answer

What would cause a corporate bond with a €1,000 face value and a fixed interest rate of 7 percent to increase in value?

Correct AnswerverifiedShow Answer

In order to reach goals of high returns on your investments, what must you generally give up?

Correct AnswerverifiedShow Answer

A government security that is sold in €100 units with a maturity of more than one year but not more than ten years is a

Correct AnswerverifiedShow Answer

A ____ of funds exists when one investment company manages a group of mutual funds.

Correct AnswerverifiedShow Answer

A 12b-1 fee is

Correct AnswerverifiedShow Answer

Interest payments on corporate bonds are usually paid

Correct AnswerverifiedShow Answer

Corporate bonds are a form of

Correct AnswerverifiedShow Answer

Robert has been saving his money and decides he wants to invest it.Which of the following is considered the most speculative?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

When Kathy Wright completed her training, she expected to be given a stockbroker's position.Instead, she is an account executive.This is a better descriptive term than stockbroker because she actually buys and sells all types of securities, not just stock.

Correct AnswerverifiedShow Answer

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