Securities Markets & Business Lesson Plans Chapter Exam

Exam Instructions:

Choose your answers to the questions and click 'Next' to see the next set of questions. You can skip questions if you would like and come back to them later with the yellow "Go To First Skipped Question" button. When you have completed the practice exam, a green submit button will appear. Click it to see your results. Good luck!

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Question 1 1. What's the best explanation of diversification?

Question 2 2. What is another term for stock?

Question 3 3. Which of these bond types allow the issuer the opportunity to retire a bond at a stated dollar amount before reaching maturity?

Question 4 4. Why might some people see preferred stock as being the BEST option?

Question 5 5. Which of the following agencies regulates the trading of stock?

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Question 6 6. What's the difference between a person acting as a broker as opposed to a dealer?

Question 7 7. Why would a company want an investment bank to underwrite an initial public offering versus using the best-efforts basis?

Question 8 8. Mary wants to invest in a security that is sold on stock market. If she wants the highest diversification, what should Mary do?

Question 9 9. What's the name of a disclosure document required by the SEC to be provided to potential investors of publicly traded securities?

Question 10 10. What does an investment banker do?

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Question 11 11. Which of the following statements about technical analysis and technical indicators is FALSE?

Question 12 12. What federal government agency regulates securities such as stocks?

Question 13 13. When does a term bond become mature?

Question 14 14.

X is a type of bond that is payable to whoever holds it. As such, anyone can claim ownership of X. Because of the risk associated with X, very few are in circulation today.

Identify X.

Question 15 15. How does common stock differ from preferred stock?

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Question 16 16. What's the difference between a primary securities market and a secondary securities market?

Question 17 17. Which of the following indicators gauges the total economic output of an economy in order to forecast movement in the stock market?

Question 18 18. How is an unsecured bond different from a secured bond?

Question 19 19. Which of the following is the best explanation of a private placement?

Question 20 20. Which of the following describes the effect of bond financing on owner control?

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Question 21 21. Why would an investor buy investment vehicles other than mutual funds or exchange-traded funds?

Question 22 22. Aneeka is reviewing the ratio of stocks that are trending up to stocks that are trending down. Which indicator is she using?

Question 23 23. The Fudge Factory issues a bond with a par value of $100,000 that pays an interest rate of 7% annually for 10 years. How much will each semiannual (every six months) coupon payment be?

Question 24 24. What is a creation unit?

Question 25 25. How would an investment bank help a company raise funds in the secondary securities market?

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Question 26 26. What's the best explanation of a bond?

Question 27 27. _____ measures market volatility to forecast significant changes in stock prices.

Question 28 28. Which of these bond types provides the bondholder with the right to exchange the bond for a specific number of shares in the company's common stock before the maturity date?

Question 29 29. Gordon believes a company's stock is going south. He gets his broker to loan him 1,000 shares at the current price of $100 per share. He sells the shares for $100,000, waits for the stock to drop like a rock to $75 per share and buys the shares back for $75,000. He gives the shares to his broker and pockets $25,000 in profits. What did Gordon just do?

Question 30 30. Which of the following is the term for when a bond is due?

Securities Markets & Business Lesson Plans Chapter Exam Instructions

Choose your answers to the questions and click 'Next' to see the next set of questions. You can skip questions if you would like and come back to them later with the yellow "Go To First Skipped Question" button. When you have completed the practice exam, a green submit button will appear. Click it to see your results. Good luck!

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