Assessment 2

in a rising interest rate environment which industry is most likely to experience the largest impact on interest expense? A) Utility B) Pharmecutical C) Construciton D) Beverage

A) Utility Utility stocks are most affected by interest rates -- most highly leveraged companies of the choices

dividend on preferred (or common) stock is a percentage of

PAR

what is a BENEFIT to a limited partner in a DPP

limited liability

this act established minimum standards for private sector retirement plans

ERISA *does not govern public sectors (US gov)

a brokerage firm cannot open an individual account for __________

a minor **it can open an UGMA account with an adult as the custodian for one minor

A company is about to pay a dividend on $0.70. On the ex-dividend date, an open order to sell at 46 stop would

be automatically adjusted DOWNWARD to 45.30 **this is a sell stop order

nonagricultural employment is what kind of economic indicator?

coincident

___________ based account would be good for an investor who prefers to place a small number of trades as part of their investment stratetgy

commission based

What is the role of the Federal Reserve Open Market Committee?

determine money supply direction by controlling the open markets

ADRs are used to facilitate

domestic trading of foreign securities **issued by domestic banks and represent an interest in a foreign corporation

___________ based account would be good for an investor who prefers to make frequent trades as part of their investment stratetgy

fee - based

what are 3 RISKS to a limited partner in a DPP

high illiquidity tax law changes IRS audit

in a competitive bidding for a municipal bond to be issued at par, the underwriter will be selected on the basis of the

lowest interest rate offered **in a competitive bid --- the underwriter submitting the bid yielding the lowest net interest cost (lowest true interest cost) to the issuer will be selected to underwrite and distribute the bonds to the public

this type of account would typically receive a monthly statement to reflect the interest charges that have been posted to the account during that month

margin account

Regulation D is

private placement -- for people with $$

brokerage accounts which are active OR inactive must receive account statements

quarterly

Regulation A is for

smAll businesses

when an index option is exercised

the writer delivers cash to the buyer