Unit 3 (section 4) study guide

Let's say you've invested in a mutual fund with a total investment portfolio value of $60 million. Its liabilities are $5 million, and it has issued 5 million shares. What is the value of each share?

11 shares

Let's say you've invested in a mutual fund with a total investment portfolio value of $30 million. Its liabilities are $6 million, and it has issued 6 million shares. What is the value of each share?

4

Let's say you've invested in a mutual fund with a total investment portfolio value of $50 million. Its liabilities are $5 million, and it has issued 9 million shares. What is the value of each share?

5 per share

Which of the following is not a reason that companies issue stock:

To gain respect

Jamie owned 300 shares in a certain company, worth $10 per share. The company recently announced that his 300 shares would become 600 shares, worth $5 per share. This is an illustration of:

a stock split.

The advantage of investing in ___________is the combination of stock growth and bond income in one mutual fund.

balanced funds

Mutual funds that contain both stocks and bonds are known as:

balanced funds.

Darron is investigating a few corporate bonds for investment. He wants to know how likely it is that the corporations will pay back what they have borrowed. Darron needs to look at the:

bond rating.

Which is the least important variable of a bond fund?

bond savings

Robyn bought $100 worth of stock in a company, and the stock is now worth $150. This is an illustration of:

capital appreciation.

A fund has a set number of shares it can issue, determined before it's ever established is called?

close end

Which type of stock comes with voting rights?

common

Which type of bond does a company issue to raise financing for ongoing operations or expanding the business?

corporate bond

Since John wants to know the bond's interest rate, he needs to look at the bond's:

coupon

Because stocks in pharmaceutical companies hold their value regardless of the state of the economy, they are known as __________ stocks.

defensive

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 of her mutual funds became worthless, but since her investment was spread out, Teri was only slightly affected. What advantage of mutual funds does Teri's situation illustrate?

diversification

A company that Marcus invested in has earned a profit, and now he is receiving a cash payment. This is an illustration of:

dividends

Which individual does in-depth work on formulating investment strategies for clients, helping them fulfill their needs, and reaching their financial goals?

financial consultant

Which is considered a reliable bond?

government

Stocks that are most likely to appreciate in value over the short term.

growth funds

Sector funds does what?

invest in stocks from one specific industry, such as oil.

An individual who often works as part of a financial institution and is primarily concerned with raising capital for corporations, governments, or other entities is called a/an:

investment banker.

The ability to easily convert your investment back into cash is known as

liquidity

Which is a disadvantage of investing in bonds?

low returns

Kent wants to learn as much as possible about the mutual fund that he is considering as an investment. Which is the best place he could go for detailed information?

mutual fund prospectus

Which best describes a marketable bond?

one that is bought and sold in the open market

There is no limit on the amount of shares the fund can issue or the amount of money it can hold.

open end

A mutual fund that has no limit on the number of shares it can issue or the amount of money it can hold is called a/an:

open-end fund.

A stock with a price of $1 or less is known as a __________ stock.

penny

A document containing all vital information about the fund is called a?

prospectus

A place where investors can trade securities that have been issued by a corporation is known as a/an:

secondary market.

The specialist who is a member of a stock exchange and acts as the market maker to facilitate the trading of a given stock is called a:

securities operations specialist.

To get a general idea of the direction of the stock market today, check a?

stock market index

Which person will analyze, interpret, and process a wide variety of transactions, and be aware of their impact to assets on behalf of a beneficiary?

trust operations specialist

Which type of stock is considered a "bargain"?

value

A bond's profit or loss over a period of time at a particular amount is called the:

yield