BUSN ch. 10 quiz

The _____ is an index based on the adjusted average price of stocks of 30 major corporations picked by the editors of the Wall Street Journal.

Dow Jones Industrial Average

The _____ established the Federal Deposit Insurance Corporation, which insured depositors against financial losses when a bank failed.

Glass-Steagall Act of 1933

Passed during the early twenty-first century, the _____ increased the Securities and Exchange Commission's authority to regulate financial markets and investigate charges of fraud and unethical behavior.

Sarbanes-Oxley Act

A(n) _____ is an organized venue for stockbrokers and securities dealers to trade listed stocks and other securities for their clients.

securities exchange

_____ is an arrangement under which an investment banker agrees to purchase all shares of a public offering at an agreed-upon price.

underwriting

Which of the following approaches for investing in securities requires intensive research to identify discrepancies between a company's true worth and its current market price?

value investing

_____ is found by dividing the dividend per share by the previous day's price per share.

yield

The Securities Exchange Act of 1934 required that all publicly traded firms with at least _____ file quarterly and annual financial reports with the Securities and Exchange Commission (SEC).

500 shareholders and $10 million in assets

Which of these statements is true of the Dodd-Frank Act of 2010?

B. this law created the financial stability oversight council to identify emerging risks in the financial sector

In the context of buying securities, which of the following statements is true of a buy limit order?

a. It tells a broker to buy a stock only if its price is at or below a specified value.

Which of the following statements is true of exchange-traded funds (ETFs)?

b. ETF's usually have lower costs and fees than mutual funds

Which of the following is true of bonds?

b. When a bond's market price is above its par value, it is selling at a premium

Buy-and-hold investors put their faith in the ability of the overall market to continue the long-run upward trend it has exhibited throughout its history. One way that many buy-and-hold investors do this is by:

c. investing in index mutual funds and exchange-traded funds

The _____ on a bond expresses the annual interest payment as a percentage of the bond's par value.

coupon rate

_____ are not-for-profit organizations owned by their depositors, which strive to pay higher interest rates on member deposits and charge lower interest rates on loans.

credit unions

Which of the following statements is true of mutual funds?

d. It is easy to withdraw funds from a mutual fund

Investors who employ the buy and hold investment approach:

d. purchase a diversified portfolio of securities and keep them for a long period of time.

_____ are financial intermediaries that obtain funds by accepting checking and savings deposits from individuals, businesses, and other institutions, and then lending those funds to borrowers.

depository institutions

_____ are shares traded on securities markets that represent the legal right of ownership over part of a basket of individual stock certificates or other securities.

exchange-traded funds

_____ are securities dealers that commit to continuously offering to buy and sell specific NASDAQ-listed stocks.

market makers

_____ are financial intermediaries that participate directly in securities markets, buying and selling stocks and bonds for their own account.

securities dealers