Ch 10 LO 5

Investors who employ the "buy and hold" investment approach...

hold a diversified portfolio of securities and are willing to ride out the short-term downturns in the market.

Individuals using a value investing strategy search for stocks thag

Are undervalued in the market

Individual investors are not permitted to directly trade stocks on NYSE or NASDAQ therefore individuals must seek the help of a

Broker

Harry knows that the stock market sometimes goes through rough times and that the stocks of poorly managed companies can lose value. But he noticed that over the long run the general direction of stock prices has been upward. He is a patient investor who favors holding several different stocks and letting the market take its course. Harry's approach most closely fits the

Buy and hold strategy

Investors who want to generate a steady predictable income are likely to hold all of the following securities except

Common stock in companies with the potential for rapid growth

A comparison of full service brokers and discount brokers suggests that

Competition has blurred the distinction between the two types of brokers

Warren Buffet is considered by many to be the worlds most famous value investor. As a value investor Warren Buffet favors

Finding stocks that are priced in the market below the intrinsic worth of the company

Which statement about personal investing is true

I'm general riskier investment strategies offer the potential for a higher return

You are 24 years old and a recent college graduate. Having landed your first job you also know that it is never too early to begin investing for your future needs. At your age which of the following investment strategies would be most likely to help you accumulate significant wealth over the long haul?

Invest mainly in diversified set of common stocks

Stuart want to buy some additional stock in Admiral Engines but the price of the stock has fluctuated in recent days. He wants to make sure he doesn't pay to much. His analysis suggests that $26 per share is the highest price he should pay. Stuart is likely to place a __________ with his broker

Limit order

Suri owns 100 shares in OPQ Oil Company. After looking at the firms latest annual report, she feels good about the performance of the company so she tells her broker to buy 100 more shares but pay no more than $33 a share. Suri has just issued her broker a

Limit order

A ________ instructs the broker to buy or sell a security at the best available current market price.

Market order

Investors who use analytical techniques to try to predict when prices of particular stocks are likely to rise and fall are relying on

Market timing

The objective of the market timing strategy is to

Predict changes in stock prices in order to earn a quick profit by buying low and selling high

Investors who want to achieve a _______ tend to invest mainly in bonds and _______

Steady income; preferred stocks