Business test

Which type of stock comes with voting rights? A) Common B) Preferred C) Income D) Small-cap

A) Common

Teri decided to invest in a few different mutual funds rather than put all her investment dollars into one or two individual stocks. A stock in one or her mutual funds went bust, but since her money was spread out, Teri wasn't significantly affected. What advantage of mutual funds does Teri's situation illustrate? A) Diversification B) Convenience C) Liquidity D) Professional money management

A) Diversification

Which of the following is the best place to buy share in a mutual fund: A) Fidelity Investments B) Main Street Local Bank C) Good Hands Insurance D) Mike Jones, Financial planner

A) Fidelity Investments

Kent wants to learn as much as possible about the mutual fund he's thinking of investing in. Which of the following is the best place he could go for detailed information: A) The fund's prospectus B) A trade magazine C) The fund's web site D) The newspaper

A) The fund's prospectus

Jamie owned 300 shares of stock in a certain company, worth $10 per share. Then, the company announced that this 300 shares would become 600 shares, with $5 per share. This is an illustration of A) a stock split B) a stock exchange C) dividends D) capital appreciation

A) a stock split

Because stocks in pharmaceutical companies hold their value regardless of the state of the economy, they are know as _______________ stocks. A) defensive B) penny C) speculative D) cyclical

A) defensive

Melinda wants to invest in a bond, but her main concern is how soon she'll be able to access the money she's invested. Melinda needs to look at the A) liquidity B) bond rating C) bid price D) yield

A) liquidity

Which of the following is not a benefit of investing in bonds: A) Performing well when the economy is poor B) Bringing you high returns C) Offering unmatched reliablility D) Helping you meet long-term goals

B) Bringing you high returns

Which of the following best describes the relationship between bonds and the stock market: A) Liquid B) Inverse C) Striaght D) Beneficial

B) Inverse

Which of the following is not an important variable of a bond fund: A) The average maturity of the bonds in the fund B) The amount of time you spend researching the bonds in the fund C) The credibility ratings of the bonds in the fund D) The rate at which your money grows

B) The amount of time you spend researching the bonds in the fund

Which type of stock is considered a "bargain"? A) Income B) Value C) Domestic D) Growth

B) Value

Mutual funds that contain both stocks and bonds are known as A) exchange-traded funds B) balanced funds C) index funds D) money market funds

B) balanced funds

Robyn bought $100 worth of stock in a company, and now it's worth $150. This is an illustration of A) a stock exchange B) capital appreciation C) dividends D) a stock split

B) capital appreciation

A company that Marcus invested in has earned a profit, and now Marcus is receiving a cash payment. This is an illustration of A) capital appreciation B) dividends C) a stock exchange D) a stock split

B) dividends

A fund that invests in stocks that tend to be undervalued or overlooked is called a A) sector fund B) value fund C) blend fund D) growth fund

B) value fund

Which of the following is not a reason that companies issue stock: A) To develop new products B) To acquire other companies C) To gain respect D) To fuel growth and expansion

C) To gain respect

When Janine wants to know what others are willing to pay for a bond she owns, she looks at the A) issuer B) coupon rate C) bid price D) bond rating

C) bid price

Which of the following is not a loan to a governing body: A) municipal bond B) savings bond C) corporate bond D) treasury bond

C) corporate bond

Since John wants to know the bond's interest rate, he needs to look at the bond's A) par value B) issuer C) coupon D) maturity

C) coupon

The price of a mutual fund's shares is determined by A) liabilities B) outstanding shares. C) net asset value D) investment portfolio value

C) net asset value

A stock with a price of $1 or less is known as a __________ stock. A) defensive B) value C) penny D) cyclical

C) penny

A place where investors can trade securities that have been issued bu a corporation is known as a(n) A) primary market B) stock market index C) secondary market D) initial public offering

C) secondary market

To get a general idea of the direction of the stock market today, check a A) a secondary market B) stock exchange C) stock market index D) blue-chip company

C) stock market index

Which of the following best describes a marketable bond: A) One that is paid back before maturity B) One that becomes a stock at a later time. C) One that is issued by a governing body. D) One that is bought and sold in the open market.

D) One that is bought and sold in the open market.

Darron is investigating a few corporate bonds for investment. He wants to know who likely it is that the corporations will pay back what they've borrowed. Darron needs to look at the A) coupon rate B) issuer C) liquidity D) bond rating

D) bond rating

"Spiders" and "cubes" are types of A) bond funds B) hybrid funds C) international funds D) exchange-traded funds

D) exchange-traded funds

Commission fees associated with mutual funds are known as A) ETSs B) expense ratios C) NAVs D) loads

D) loads

A mutual fund that has no limits on the number of shares it can issue or the amount of money it can hold is called A) stock fund B) closed-end fund C) growth fund D) open-end fund

D) open-end fund

What a bond brings you over a period of time at a particular price is called the bond's A) maturity B) liquidity C) bid price D) yield

D) yield

Which of the following is considered a reliable bond: A) Corporate B) Government C) Puttable D) Callable

b) GOVERNEMNT