Finance exam 4 review

Which of the following steps should be completed before making your first investment? work to balance your budget
Which of the following is NOT one of the four components of the risk factor to be considered when evaluating investments? Stock risk
Which of the following risks associated with preferred stocks or government or corporate bonds is a result of changes in rates in the economy? interest rate risk
If your main focus is to be able to buy or sell an investment quickly without substantially affecting the investment’s value, you are most concerned with liquidity
Which of the following has returned an average of almost 10% per year since 1926? stocks
If you need access to your funds in two years or less, which of the following investments would be least appropriate? stocks and mutual funds
Interest paid to corporate bond owners is Tax-deductible for the corporation.
T/F Individual investors who purchase U.S. government securities must hold the investments until maturity. FALSE
A bond that is repaid from the income generated by the project it is designed to finance is called a(n) revenue bond
A U.S. government security issued in $100 units with maturities of more than 1 year but not more than 10 years is called a treasury note
This calculation uses the current price per share and the annual amount of money paid to investors from the company. Dividend yield
This calculation includes the yearly dividends in dollars plus the increase in the original purchase price of the investment. total return
The NYSE is an example of a(n) securities exchange
Excessive buying and selling of securities to generate commissions is called churnning
Devin wants to purchase DEF stock for a specified price of $40.00 or less, and he understands this request will be executed after all previously received orders have been fulfilled. He should use a limit order
Gavin has owned MNOP stock for several years and has seen the stock increase in value from $20 to $35. He wants to “lock in” his gains, so he needs to place an order that will sell his stock at the next available opportunity after its market price drops to $33. What kind of order should he use? stop-loss order
investors who earn larger returns because they borrow part of the money needed to by a particular stock are using which of the following techniques? buying a margin
The opportunity, but not the obligation, to buy a security within a specified period of time at a guaranteed price is a call option
The opportunity, but not the obligation, to sell a security within a specified period of time at a guaranteed price is a put option
Which type of fund has the prices determined by factors of supply and demand like the prices of a stock? closed end fund
Sally wants to invest in a fund that invests only in stock. Which of the following will meet her needs? midcapp funds
Thomas wants to invest in a fund that invests in stock, bonds, and money market instruments. Which of the following will meet his needs? asset allocation funds
Whose shares are issued and redeemed by the investment company at the request of investors? open end fund
Which of the following is correct for a closed-end fund? The price of its shares is determined by supply and demand, by the value of stocks in the portfolio, and by investor expectations.
Which of the following types of stock funds invests in stock issued by companies with a long history of paying dividends? equity income funds
Which of the following types of stock funds invests in the same companies included in the Standard & Poor’s 500 stock index? index funds
Payments to a fund’s shareholders that result from the sale of securities in the fund’s portfolio are capital gain distributions
If you hold mutual fund shares in your Roth individual retirement account, the taxes on reinvested income will be eliminated
Melinda wants to withdraw some money from her mutual fund. She has a minimum required asset value of $10,000. Which of the following is not an option available for her to systematically withdraw some money? Withdraw all principal and leave interest dividends and capital gain distributions in the account
When an employer’s contribution is used to buy stock in the company for its employees, it has a stock bonus plan
Vesting is the right to receive the Employer’s contributions to a pension plan even if the employee leaves the company before retiring.
Julian’s annual contributions to his retirement are not tax-deductible, but his earnings accumulate tax-free. He is investing in a roth IRA
Jill is 45 years old and thinks that her future tax rate will be lower than what she currently pays, so she wants to defer her taxes on her contributions of up to $5,500 in 2017. Which plan would allow her to meet her goals? regular IRA
Another name for a Coverdell account is a(n) Education IRA
The letter of last instruction is A non-legally binding document that provides information regarding your death such as funeral arrangements.
A handwritten will is known as a(n) Holographic will.
A codicil is A document that explains, adds, or deletes provisions in an existing will.

Leave a Reply

Your email address will not be published. Required fields are marked *