1. Which of the following statements is true regarding buying stocks on-margin?

- A margin-call occurs when the value of the stock has decreased and the lender demands repayment of the loan, in full

- In order to buy stocks on-margin an investor must be pre-approved for this special type of loan offered through commercial banks, and the loan re-payment is then calculated like a standard annuity

- There is no maximum dollar amount nor maximum portion of the investment proposed when buying stock on margin, so long as the lender agrees

- An investor may choose to buy shares in a stock on-margin in order to avoid the disadvantages of buying an odd lot

2. Afaf bought Stock A for $1000 and then sold it for $2000.She also bought Stock B for $1000 but lost money and sold it for only $500.When tax season comes around, what will she discover is her taxable capital gain?

- $2000

- $1000

- $250

3. Which of the following statements regarding different investment options is not true?

- Mutual Funds are not a type of investment so much as a cooperative investment structure

- Bonds represent a loan where you are the lender

- Stocks represent ownership in a company

- In fact, all of the statements regarding different investment options are true

4. If you were to place an order for a stock transaction with a limit order, which of the following situations would then be likely to result?

- Selling at a lower price per share, despite the fact that at that price you would have preferred to hold onto the stock and wait for a rebound

- All of the situations described would be likely results of a limit order placed on a stock transaction

- Having your stock sold on your behalf even if you were unaware the price was currently falling

- Paying a higher price per share than you had intended, or even could really afford