Question
1. ____ is a short-term investment activity. a. Buying life insurance b. Buying bonds c. Investing in common stock d. Speculating in common stock e.
1. ____ is a short-term investment activity.
| a. | Buying life insurance |
| b. | Buying bonds |
| c. | Investing in common stock |
| d. | Speculating in common stock |
| e. | Saving |
2. Which of the following is least likely to be an investment objective?
| a. | enhance current income |
| b. | save for a major purchase |
| c. | pay monthly bills |
| d. | accumulate funds for retirement |
| e. | seek shelter from taxes |
3. Which of the following is a characteristic of an organized securities exchange?
| a. | they facilitate trading unlisted securities |
| b. | municipal bonds are primarily traded in organized exchanges |
| c. | pink sheets are commonly used in these markets |
| d. | the NASDAQ is an example of an organized exchange |
| e. | trading in securities is carried out in a physical location |
4. Which of the following is not a securities market
| a. | capital market |
| b. | money market |
| c. | primary market |
| d. | secondary market |
| e. | Dow Jones market |
5. Which of the following types of brokers is most likely to involve an investor trading electronically from his or her personal computer?
| a. | Full service broker |
| b. | Bank broker |
| c. | Futures broker |
| d. | Online broker |
| e. | Market maker |
6. The Securities Investor Protection Corporation insures brokerage firm accounts up to
| a. | $500,000 per account and $250,000 in cash |
| b. | $250,000 per account and $100,000 in cash |
| c. | $1,000,000 per account and $500,000 in cash |
| d. | $500,000 per account and $250,000 in cash |
| e. | $500,000 per account and $100,000 in cash |
7. Which of the following securities/investment acts regulates the sale of mutual fund shares?
| a. | The Securities Act of 1933 |
| b. | the Securities and Exchange Act of 1934 |
| c. | The Investment Company Act of 1940 |
| d. | The Sarbanes/Oxley Act of 2002 |
| e. | The Securities and Protection Act of 1970 |
8. During a bull market
| a. | prices go up |
| b. | prices go down |
| c. | prices remain stable |
| d. | investments are pessimistic |
| e. | cattle futures perform well |
9. The most important investment prerequisites are
| a. | adequate income and savings. |
| b. | adequate income and insurance. |
| c. | adequate insurance and liquidity. |
| d. | an investment plan and professional advice. |
| e. | consistency and risk awareness. |
10. The most common reason given for investing is
| a. | enhancing current income. |
| b. | saving for retirement. |
| c. | sheltering earnings from taxes. |
| d. | paying for an expensive vacation. |
| e. | saving for college education. |
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