Chapter 31 Business

A)corporate bond

A bond issued by a corporation is called a ________ . A)corporate bond B)market share C)stock option D)share of stock

B)municipal

A bond issued by a state government is called a _________ bond. A)local B)municipal C)regional D)state

D)stockbroker

A person who buys and sells stocks, bonds, and other securities for a client is called a ________ . A)bond trader B)securities dealer C)commissioner D)stockbroker

Stockbroker

A person who buys and sells stocks, bonds, and other securities for clients

C)capital gain

A profit made from the sale of a financial asset such as stock is called a(n) ________ . A)asset return B)interest payment C)capital gain D)stock exchange

stock

A share of ownership in a business

B)stake

A share of ownership in a corporation is called a ________ . A)claim B)stake C)right D)stock

A)dividend

A share of profits given back to stockholders is called a ________ . A)dividend B)rebate C)kickback D)stock option

dividends

A share of profits given to stockholders

C)security

A tradable document that shows evidence of debt or ownership is called a ________ . A)bond B)share of stock C)security D)stock option

A)bond

A(n) _________ is a certificate issued by a government or company in which it promise to pay back borrowed money at a fixed rate of interest on a specified date. A)bond B)coupon C)option D)T-bill

C)common

All corporations must issue ________ stock. A)basic B)discount C)common D)regular

Capital loss

Amount lost when an asset is sold for less than its cost

B)stock exchange

An organized market for buying and selling financial securities is called a(n) ________ A)auction market B)stock exchange C)brokerage house D)stock market

corporate bonds

Bonds issued by corporations to finance things such as construction and equipment

municipal bonds

Bonds issued by local and state governments to finance city, town, or regional projects such as schools, highways, and airports

bond

Certificate issued by a government or company promising to pay back borrowed money at a fixed rate of interest on a specified date

bond discount

Difference between the amount you pay for the bond and its face value

A)capital loss

If a person sells an asset for less than he or she paid for it the result is a ________ . A)capital loss B)discount C)real loss D)shortfall

Capital gain

Profit made from the sale of a financial assets such as a stock or a house

coupon rate

Rate of interest on a bond

savings bonds

Registered bonds that are sold in denominations of $50-$10,000

Preferred stock

Stock that gives the owner of the advantage of receiving cash dividends before common stockholders receive any

C)preferred

Stock that gives the owner the advantage of receiving cash dividends before common stock holders is called ________ stock. A)blue-chip B)selective C)preferred D)VIP

Common stock

Stock that provides the most basic form of corporate ownership

D)over-the-counter

The NASDAQ is an electronic stock market system that quotes ________ securities. A)discount B)high-tech C)foreign D)over-the-counter

A)bond discount

The difference between the amount you pay for a bond and the bond's face value is the ________ . A)bond discount B)bonus C)commission D)yield

A)Securities and Exchange Commission

The government agency that supervises the exchange of securities to protect investors from wrongdoings is called the ________ (SEC). A)Securities and Exchange Commission B)Securities and Exchange Council C)Stock Exchange Commission D)Stock Exchange Council

B)coupon rate

The rate of interest on a bond is called the ________ . A)bond rate B)coupon rate C)discount rate D)interest rate

D)yield

The return on an investment is the amount of money the investment earns, or the ________ . A)commission B)interest C)payout D)yield

B)bonds

Treasury _________ are issued in $1,000 units, with a maturity of 30 years. A)bills B)bonds C)notes D)stocks

C)the full face value

Treasury bills are sold in units of $1,000 and on the maturity date the investor receives________ . A)$1,000 B)$1,000 plus interest C)the full face value D)the face value less a commission

C)1000

Treasury bills are sold in units of how much?Need a Hint? A)50 B)100 C)1000 D)1500

A)investing

Using money to participate in an enterprise that offers the possibility of profit is called ________ . A)investing B)risk C)security D)trading

A)a bond

What is a certificate issued by a government or company by which it promises to pay back borrowed money at a fixed rate of interest?Need a Hint? A)a bond B)a commodity C)a yield D)a coupon rate

A)the discount

What is the difference between the amount you pay for a bond and its face value?Need a Hint? A)the discount B)the commission C)the coupon rate D)the yield

C)the coupon rate

What is the yield on a bond called?Need a Hint? A)the commission B)the bond discount C)the coupon rate D)the maturity rate

D)Most bonds are secure.

Which is NOT a disadvantage to investing in bonds?Need a Hint? A)Inflation may be greater than the interest on a bond. B)Most bonds are written for a minimum of $1,000. C)If sold before a bong matures, you can loose money. D)Most bonds are secure.

B)stocks

Which is NOT a type of security that the U.S. Treasury Department issues?Need a Hint? A)Treasury bills B)stocks C)notes D)bonds

A)a commodity

Which is a tradable document that shows evidence of debt or ownership?Need a Hint? A)a commodity B)a security C)a yield D)an investment

C)Stocks are generally less risky than bonds.

Which statement is NOT true about stocks?Need a Hint? A)When you buy stock, you receive a stock certificate. B)Stock prices change throughout the day. C)Stocks are generally less risky than bonds. D)Stocks are a share of ownership in a corporation.

D)They can be redeemed at any time

Which statement is NOT true regarding U.S. savings bonds?Need a Hint? A)They are registered bonds. B)They are sold in denominations of $50 to $10,000 C)They cannot be bought or sold once purchased. D)They can be redeemed at any time

B)The interest rate fluctuates over the life of the bond.

Which statement is NOT true regarding a Series EEsavings bonds?Need a Hint? A)It costs half the amount of its face value. B)The interest rate fluctuates over the life of the bond. C)You pay a penalty if you cash the bond before 5 years. D)It can become worth more than its face value.

A)It costs half the amount of its face value.

Which statement is NOT true regarding a Series Isavings bonds?Need a Hint? A)It costs half the amount of its face value. B)The interest rate fluctuates over the life of the bond. C)As inflation goes up, the interest rate on the bond increases. D)If you redeem the bond before 5 years, you forfeit three months interest.

A)a stock exchange

Which term refers to an organized market for buying and selling financial securities?Need a Hint? A)a stock exchange B)a stockbroker C)a common stock D)a preferred stock

D)the yield

Which term refers to the money an investment earns?Need a Hint? A)the discount B)the commission C)the option D)the yield

B)a capital gain

Which term refers to the profit made from the sale of a financial asset such as stock?Need a Hint? A)a dividend B)a capital gain C)a capital loss D)interest

C)municipal bonds

Which type of bond is issued to finance city, town or regional projects?Need a Hint? A)Treasury bills B)corporate bonds C)municipal bonds D)U.S. savings bonds

Mutual fund

a fund created by an investment firm that raises money by many shareholders and invests it in a variety of stocks or other investments

security

a tradable document that shows evidence of debt or ownership

Stock exchange

an Organized market for buying and selling financial securities

investing

committing money or capital in order to gain financial return

yield

the amount of money that an investment earns