QUESTION 1

1. The Securities Act of 1933 requires that investors have full access to all important facts about stocks, bonds, and other securities so that they can make informed decisions.

   	A.	True
   	B.	False

10 points

QUESTION 2

1. Which of the following describes why exchange-traded funds have less need for a portfolio manager than closed-end funds?

   	A.	ETFs normally invest in stocks, bonds, or securities within a specific index.
   	B.	ETFs are actively managed.
   	C.	ETFs have portfolio managers that actively select stocks and other securities on a regular basis.
   	D.	ETF fees are generally higher.
   	E.	ETFs usually hold investments in a minimum of three indexes.

10 points

QUESTION 3

1. In order to reach goals of high dollar returns on your investments, what must you generally give up?

   	A.	Risk
   	B.	Safety
   	C.	Stocks
   	D.	Money
   	E.	Return

10 points

QUESTION 4

1. Jim Andrews purchased a government security that cost $50. At maturity, this security will be worth $100. Jim purchased a

   	A.	general obligation bond.
   	B.	U.S. savings bond.
   	C.	revenue bond.
   	D.	corporate bond.
   	E.	Treasury bill.

10 points

QUESTION 5

1. A request that a stock be purchased or sold at the current market price is called a

   	A.	market order.
   	B.	limit order.
   	C.	margin order.
   	D.	spot trade.
   	E.	round-lot order.

10 points

QUESTION 6

1. All of the following would satisfy the safety factor of investing except

   	A.	savings accounts.
   	B.	blue-chip stocks.
   	C.	a certificate of deposit.
   	D.	highly rated municipal bonds.
   	E.	antiques and collectibles.

10 points

QUESTION 7

1. If Sara purchases 100 shares of Abercrombie and Fitch stock for $20 a share and then sells the stock for $23 per share, Sara will have a

   	A.	$3 dividend per share.
   	B.	capital gain of $300.
   	C.	capital gain of $100.
   	D.	$300 decrease in the value of her stock.
   	E.	total return of $3.

10 points

QUESTION 8

1. Which of the following statements is true?

   	A.	Common stock is a more conservative investment than preferred stock.
   	B.	Dividends on preferred stock are less secure than dividends paid to common stockholders.
   	C.	Preferred stockholders have a priority claim on dividends before common stockholders.
   	D.	As the basic form of ownership, common stockholders receive their dividends before any other class of stock.
   	E.	As the basic form of ownership, common stockholders have a priority claim on a firms assets if the firm enters bankruptcy.

10 points

QUESTION 9

1. The practice of board members, corporate management, and employees buying and selling a corporations stock is

   	A.	corporate manipulation.
   	B.	management investment trading.
   	C.	SEC trading.
   	D.	insider trading.
   	E.	illegal trading.

10 points

QUESTION 10

1. The purpose of a budget is to

   	A.	determine the amount of your total liabilities.
   	B.	develop a plan for spending your future income over a specific time period.
   	C.	reduce total assets.
   	D.	increase monthly expenses.
   	E.	develop a plan for increasing credit purchases.