BUS 101 Chapter 10

In the context of the various strategies for investing in securities, which of the following is a drawback of value investing?

The competition to locate undervalued stocks is intense

Which of the following statements is true of credit unions?

They are open to individuals who belong to a specific field of membership

The Federal Reserve System was:

created to serve as the central bank in the United States.

In the context of open-end mutual funds, the net asset value per share (NAVPS) is computed by:

dividing the total value of the fund's cash, securities, and other assets by the number of fund shares outstanding

A(n) _____ is the first time a company issues stock that may be bought by the general public.

initial public offering

In the context of the various strategies for investing in securities, the problem with market timing is that:

it is tough to consistently identify the timing and direction of changes in stock prices

Almost all firms that go public enlist the help of an investment bank that specializes in helping firms issue new securities. Under a best efforts approach, the investment bank:

provides advice about pricing and marketing the securities and assists in finding potential buyers.

A _____ tracks the prices of a large group of stocks that meet certain defined criteria.

stock index

A drawback of actively managed funds is:

that significant tax consequences occur when there is a lot of trading

The Securities and Exchange Commission (SEC) has the authority to go after individuals who engage in illegal insider trading, which is the practice of:

using inside information to profit unfairly from trading in a company's securities