1. Factors that should be considered in taking a stock option position include:

A: The dividend paid on the underlying stock

B: The volatility of the underlying stock

C: The time to expiration

D: The anticipated direction of market movement

E: All of the above are relevant factors in the option decision

2. Advantages of investing in tax-exempt bond funds include all of the following EXCEPT:

A: Diversification

B: Provides additional benefits to tax-deferred retirement plans

C: Automatic reinvesting

D: Fund maintains individual investors tax reports and records

E: Low initial deposit

3. Angie deposits $250 in an account that earns 12% per year. If no other deposits or withdrawals are made, how much will Angie have in her account at the end of 15 years?

A: $ 280

B: $ 700

C: $1,368

D: $3,450

E: $4,200

4. Zack needs a $100,000 loan to start his new business. Due to his age and inexperience, he is unable to obtain a bank loan. Possible alternatives to raise the funds include all of the following EXCEPT

A: promissory note from his mother.

B: having his mother co-sign a bank loan.

C: selling personal assets.

D: issuing debt in the market.

E: all of the above are possible sources of funds for Zack.

5. Preferred stock with cumulative fixed dividends

A: Are required to pay dividends each quarter

B: Must pay the missed dividend before common shareholders can receive dividends

C: Are taxed on the accumulated dividends

D: Are considered to be bankrupted if one year of dividends is missed

E: All of the above are true