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Finance Flashcards

Personal Finance: Chapter 11 Exam

The owner of a bond would expect to receive _________ annual income a steady
The Securities Investor Protection Corporation (SIPC) provides insurance to the investor from a brokerage firm’s financial failure
A trade in securities exchange: brings the buyer and seller together
Which of the following characteristics of an investor should be evaluated to formulate an effective portfolio strategy? level and stability of income
The ___________ of securities in a worksheet of investments will help in calculating the cumulative return of investments market value
The new securities sold in primary markets are handled by a(n): investment banker
Which of the following securities or investment acts regulates the sale of mutual fund shares? The investment Company Act of 1940
________ is a short-term investment activity Speculating in common stock
________ is the process of analyzing the performance of the securities held by an investor portfolio tracking
Which of the following is an order to sell a stock when the market price drops to or below a specified level a stop-loss order
The internet allows individual investors to legally: perform investment research and screening
You have been offered an opportunity to buy shares of a diversified collection of securities. You will be investing in: mutual funds
_______ have no maturity date common stocks
Which of the following is a characteristic of a stop-loss order? The stop-loss order sells a stock when market price drops below a specified price
The Dow Jones Industrial Average is based on 30 stocks
Which of the following best describes portfolio management? The buying, selling, and holding of various securities in order to meet a set of predetermined investment needs and objectives
A bear market condition is associated with: declining securities prices
Ownership in a corporation would be represented by stocks
_____________ is one of the most frequent investment objectives of an individual Enhancing current income
Which of the following is a difference between an exchange traded fund (ETF) and a mutual fund? An ETF provides more favorable tax treatment than a mutual fund
The federal government regulates the disclosure of information about securities through the Securities and Exchange Commission
The most important investment prerequisites are adequate insurance and liquidity
A diversified portfolio of securities is characterized by: dissimilar risk-return characteristics of the financial instruments.
When you buy 300 shares of a company, you have purchased: a round lot.
Retired people prefer an investment offering high current income at low risk
____________ was designed to improve the transparency and accountability of the financial system in the U.S. The legislation contains the Volcker rule, which prohibits depository banks from proprietary trading. The Dodd-Frank Wall Street and Consumer Protection Act of 2010
___________ is a process to settle disputes between a brokerage firm and its clients Arbitration
The Securities and Exchange Commission was established as a result of the Securities Exchange Act of 1934
The first thing you need to determine in order to reach an investment goal after accumulating the capital is the rate of return
Which of the following is true of bonds? Bonds are liabilities of the issuer
The _____ reflects the total market value of over 98 percent to 99 percent of all publicly traded stock in the United States Dow Jones Wilshire 5000 Index
A convertible bond would let the investor exchange it for common stock
Which of the following is true of a securities exchange? The traded securities change hands right there on the floor of the securities exchange
The __________ is based on 500 different stocks Standard and Poor’s index
Instructing your broker to buy or sell a stock at a particular price is a: limit order
___________ involves dividing a portfolio among different classes of securities in order to preserve the capital by protecting the portfolio against negative market developments. Asset Allocation
Which of the following is a characteristic of organized securities exchanges? Organized securities exchanges are also are known as broker market
Which of the following types of brokers enables an investor to trade electronically from his or her personal computer? An online broker
________ is one of the most frequent investment objectives of an individual Enhancing current income

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