securities and investments

Which one of the following is not one of the top 3 credit rating agencies for corporate and municipal bonds and stocks?
a. Fitch
b. S&P
c. Moody's
d. NASDAQ

d. NASDAQ

Capital raised by a corporation through the issue of shares entitling holders to an ownership interest or equity referred to as
a.stock
b.equity fund
c.bond
d. index fund

a.stock

A municipal bond that's backed by the issuer's full faith & credit or full taxing authority is the
a. Series EE bond
b. savings bond
c. general obligation bond
d. municipal bond

c. general obligation bond

Which of the following is not a reason for financial planning?
a. to prepare income taxes
b. to prevent careless and wasteful spending
c. to prioritize your options in order to get the most from your income
d. to evaluate how wisely you are using your money

a. to prepare income taxes

The abbreviated term that is used to identify a stock for trading purposes is the
a. ticker symbol
b. face value
c. stock split
d. market order

a. ticker symbol

\______ tax is levied by the government on property transferred from deceased people to their heirs
a. Estate
b. Inheritance
c. Equity
d. Gift

a. Estate

A market characterized by lowering prices and investor pessimism is the
a. zebra market
b. bear market
c. bull market
d. lion market

b. bear market

The person who makes a will for themselves is called a
a. executor
b. heir
c. attorney
d. testator

d. testator

One portion of ownership in a cooperation is a(n)
a. asset
b. bond
c. liability
d. share

d. share

Government sponsored health insurance for people who have a designated retirement age is
a. medicaid
b. medicare
c. social security
d. a trust fund

b. medicare

\_______ is a benefit in the form of an option given by a company to an employee to buy stock in the company at a discount or at a stated fixed price.
a.Mutual fund
b. stock option
c. tax sheltered annuity
d. stock quote

b. stock option

Factual data on the past behavior of the economy, the market, the industry, the company, or a given investment is referred to as
a. descriptive info
b. analytical info
c. arbitration
d.negotiated commissions

a. descriptive info

the interest rate changed to corporations w/ high credit ratings for unsecured loans is the
a. going rate
b. adjustable rate
c. prime rate
d. discount rate

c. prime rate

\_________ is an incident in which sensitive, protected or confidential data has potentially been viewed, stolen or used by an individual unauthorized to do so.
a. data breach
b. data base
c. financial data
d. data merge

a. data breach

Heirs must pay state \_____ tax on property they receive from an estate
a. gift
b. estate
c. income
d. inheritance

d. inheritance

\__________ is an order to buy or sell stock at the best price available when the order is placed
a. open order
b. market order
c. limited order
d. day trader order

b. market order

the person or institution appointed by a testator to carry out the terms of their will is the
a. attorney
b. heir
c. executor
d. state representative

c. executor

the financial services and markets act was passed in 2000 by the
a. france
b. s
c. mexico
d. UK

d. UK

Income tax is an example of a
a. progressive tax
b. regressive tax
c. proportional tax
d. excise tax

a. progressive tax

A brokerage account in which customers with large portfolios pay a flat annual fee that covers the cost of a money manager's services and the commissions on all trades is a
a. cash account
b. custodial account
c. wrap account
d. margin account

c. wrap account

Preferred stock where missed dividends go into arrears and must be paid before the issuer may pay dividends to other preferred stock and/ or common stock is
a. participating preferred stock
b. cumulative preferred stock
c. convertible preferred stock
d. straight preferred stock

b. cumulative preferred stock

A person who buys or sells stocks within a short period of time is a
a. certified broker
b. investment broker
c. day trader
d. mortgage investor

c. day trader

This computerized network provides prices & trading for more than 5,000 over-the-counter stocks
a. FTC
b. NASDAQ
c. SEC
b. NYSE

b. NASDAQ

The \______ charges low commissions to make transactions for customers but provides limited free research information and investment advice
a. basic discount broker
b. financial adviser
c. premium discount broker
d. full service broker

c. premium discount broker

\_____ can be exchanged for a certain number of shares of the issuer's common stock
a. secured bonds
b.debenture bonds
c.convertible bonds
d. savings bonds

c.convertible bonds

buying stocks from the corporation through no use of a middle person is a
a. direct investment
b. traded investment
c. mutual fund
d. indirect investment

a. direct investment

The group of stocks that you own is your
a. balance sheet
b. net worth
c. bank account
d. portfolio

d. portfolio

Mutual funds investors
a. must pay taxes on any dividends
b. do not pay taxes on capital gains
c. avoid taxes by reinvesting dividends
d. put all of their financial eggs in one basket

a. must pay taxes on any dividends

Transaction costs are a problem with
a. real estate investments
b. day trading
c. mutual funds
d. long-term investments

b. day trading

Stock brokers are usually paid a \______ for their services
a. flat fee
b. commission
c. dividend
d. salary

b. commission

This investment product offers diversity and professional management
a. bonds
b. corporate stock
c. stocks
d. mutual fund

d. mutual fund

the amount a bondholder will be repaid when the bond matures or is due is the
a. face value
b. par value
c. market value
d. net value

a. face value

A \______ is a regular payment during a person's retirement from an investment fund to which that person or thier employer has contributed during their working life
a. pension
b. tax sheltered annuity
c. trust fund
d. certificate of deposit

a. pension

Stocks that have a consistent history of paying high dividends are
a. income stocks
b. diversified stocks
c. growth stocks
d. common stocks

a. income stocks

Mutual funds that sell shares to individuals and invest the proceeds in the stock markets are
a. stock mutual funds
b. global funds
c. bond mutual funds
d. growth funds

a. stock mutual funds

An order to sell a stock when its market price preaches or drops below a specified level or used to buy stocks when its market price reaches or rises above a specified level is a
a. market order
b. stop-loss (stop) order
c. full service broker
d. limit order

b. stop-loss (stop) order

\______ is a retirement plan of not-for profit companies.
a. 403(b)
b. 402(c)
c. 401(g)
d. 401(k)

a. 403(b)

the date the board of directors announces a dividend on stocks is the
a. record date
b. maturity date
c. ex-date
d. declaration date

d. declaration date

A bond issued by state and local governments is the
a. municipal bond
b. malleable bond
c. treasury bond
d. savings bond

a. municipal bond

The national social insurance program that provides federal aid for the elderly and for disabled workers is
a. Social Security
b. workers compensation
c. federal income taxes
d. an annuitty

a. Social Security

The federal plan for taxing and spending is the
a. congressional plan
b. annual review
c. fiscal policy
d. federal budget

c. fiscal policy

Heirs must pay a state \_____ tax on property they receive from an estate
a. gift
b. inheritance
c. income
d. estate

b. inheritance

Projections and recommendations about potential investments based on available current data are called
a. speculations
b. descriptive
c. analytical information
d. financial solutions

c. analytical information

A distinguishable time frame in an individual's life characterized by relatively stable and physiological characteristics is the
a. decline stage
b. growth stage
c. maturity stage
d. life stage

d. life stage

When a life insurance policyholder cashes in part of the cash value of their life insurance policy is called
a. partial surrender
b. nontaxable withdrawal
c. taxable withdrawal
d. leverage

a. partial surrender

Selling stock borrowed from a broker that must be replaced at a later time is
a. speculative investing
b. selling short
c. investing in futures
d. day trading

b. selling short

A unit of ownership in a corporation is a
a. asset
b. stock
c. bond
d. security

b. stock

A preferred stock or corporate bond allowing the investor to use the par value to buy share of the company's common stock at a set price is
a. convertible preferred stock
b. cumulative preferred stock
c. participating preferred stock
d. straight preferred stock

a. convertible preferred stock

Profit earned in the stock as a percentage of the total cost of buying the stock is the
a. reinvestment
b. interest
c. dividend
d. return on investment (ROI)

d. return on investment (ROI)

Long term debt securities issues by large firms are
a. capital bonds
b. mutual funds
c. callable funds
d. treasury bonds

a. capital bonds

The insurance plan that makes regular payments to replace income lost when illness or injury prevents the insured from working is
a. term insurance
b. health insurance
c. life insurance
d. disability insurance

d. disability insurance

The savings accumulated in a permanent life insurance policy that you would receive if you canceled your policy is
a. par value
b. gross value
c. adjusted value
d. cash value

d. cash value

INsider trading in the stock market has
a. is not a problem in the US financial markets
b. only illegal elements
c. only legal elements
d. legal and illegal elements

d. legal and illegal elements

Which of the following is not an example of financial fraud?
a. embezzlement
b. stock market investment
c, tax evasion
d. bribery

b. stock market investment

NASDAQ provides prices and trading for \______ over-the-counter stocks.
a. more than 1,000
b. 1,000
c. less than 5,000
d. 2,000

a. more than 1,000

the condition of dying without a will is called
a. testator
b. intestate
c. trustee
d. estate

b. intestate

Residential and commercial land and any structures on the land are examples of
a. commodities
b. corporate investments
c. liabilities
d. real estate

d. real estate

A legal partnership through which a group of investors are bound to a specified organizational structure, operating procedures, and purpose, which is typically to earn favorable long0term returns from moderate-risk investments is the
a. over the counter market
b. investment club
c. stock market
d. limited partnership

b. investment club

Stock holders give written authorization to transfer voting right s to someone else. This is called
a. delegation
b. trust
c. absenteeism vote
d. proxy

d. proxy

The legal document disclosing material information concerning an offering of a security and its issuer is the
a. par value statement
b. articles of incorporation
c. registration statement
d. declaration of dividends

c. registration statement

You look up your stock performance for the day and it shows "end 1/2". This means that
a. the share of stock sold for $50
b. the dividend per share of stocks is 50 cents
c. a share of stock has gone up 50 cents
d. the share of stock sold for 50 cents

c. a share of stock has gone up 50 cents

A taxpayer should receive their W-2, 1099-INT, and 1099-DIV by \________ each year.
a. January 12
b. April 15
c. April 1
d. January 31

d. January 31

Money set aside for college or a house is best described as
a. mutual funds
b. savings investments
c. municipal bonds
d. savings bonds

b. savings investments

\______ is levied on a person giving a gift to another person of the gift exceeds the annual limit
a. Gift tax
b. Estate tax
c. Income tax
d. Inheritance tax

a. Gift tax

\_______ is a short document expressing the desires of the author with regard to the disposition of property
a. Simple will
b. codicil
c. estate
d. will

a. Simple will

Which of the following generally provides the RIGHT to buy a corporation's stock for the longest period of time?
a. long call
b. preemptive right
c. warrant
d. long put

c. warrant

Data Protection Act was passed by the \______ in 1988.
a. UK
b. S.
c. Germany
d. NATO

a. UK

The face value printed on the face of a stock or bond is called
a. price
b. cost
c. par value
d. market value

c. par value

A legal document expressing the desires of the author with regard to the disposition of property is called the
a. last testament
b. constitution
c. proxy
d. will

d. will

Treasury bill mature in
a. 5 years
b. 1 year or less
c. 10 years
d. 2 years

b. 1 year or less

A diversified portfolio of securities to spread the risk is called a
a. index fund
b. municipal bond
c. equity fund
d. mutual fund

d. mutual fund

\______ are individuals or firms that provide investment advice, typically free.
a. Investment advisers
b. executors
c. stock brokers
d. investment clubs

a. Investment advisers

The return an investor receives on a bond that is held to maturity and reported at an annual rate is the
a. bond yield
b. annual interest rate
c. dividend
d. interest

a. bond yield

INsurance that protects property owners for property and liability is
a. permanent life insurance
b. homeowner's insurance
c. health insurance
d. term life insurance

b. homeowner's insurance

A long term equity securities giving the owner the right to purchase stock at a set price is called a
a. pre-emptive order
b. set order
c. warrant
d. ongoing order

c. warrant

A decline in employment and spending are characteristics of a
a. prosperity
b. recession
c. growth
d. depression

b. recession

Debt owned by government is referred to as a
a. government security
b. market account
c. treasury bill
d. savings bond

a. government security

Dying without a will is called
a. probate
b. intestate
c. government estate
d. interstate

b. intestate

Over the counter market is also known as a(n)
a. second market
b. negotiated market
c. initial market
d. preliminary market

a. second market

A time deposit, which is insured with a specific, fixed term and usually a fixed interest rate is a
a. corporate bond
b. equity fund
c. certificate of deposit (CD)
d. municipal bond

c. certificate of deposit (CD)

The \__________ invests in stocks
a. index fund
b. treasury bond
c. equity fund
d. mutual fund

c. equity fund

\_______ are direct obligations of the U.S. government sold at discount and mature at the face amount, with a maximum maturity of one year
a. T-bonds
b. Denture bonds
c. T-bills
d. T-notes

c. T-bills

This savings product limits the \# of monthly checks written or withdrawals that can be made.
a. money market mutual fund
b. certificate of deposit
c. basic savings account
d. money market deposit account

d. money market deposit account

The place where stocks and bonds are bought and sold is the
a. brokerage firm
b. stock exchange
c. New York Stock Exchange
d. investment bank

b. stock exchange

The process by which investment earnings build up not only on the money originally invested but also on the earnings and gains made in previous years is
a. return
b. compounding
c. inflating
d. simple interest

b. compounding

Insurance that protects renters from property and liability risks is
a. renter's insurance
b. umbrella insurance
c. property insurance
d. liability insurance

a. renter's insurance

Which of the following defines a budget?
a. a plan to decrease your wants and needs
b. a plan to increase income
c. a plan to match expected income with expected outflow (expenses)
d. a plan to match spending with saving

c. a plan to match expected income with expected outflow (expenses)

A portion of a corporation's distributed profits normally measured as an amount per share is the
a. dividend
b. stock split
c. interest
d. profit distribution

a. dividend

Which of the following savings products are purchased for 50% of face value?
a. Treasury Bonds
b. HH Bonds
c. I bonds
d. EE bonds

d. EE bonds

The measurement of the value of stocks, usually divided into eighths. One \______ equals one dollar.
a. par
b. point
c. dividend
d. share

b. point

AN investment that is very risky but could have a good rate of return is
a. pure risk
b. insured
c. secured
d. speculative

d. speculative

Insurance that provides funds to the beneficiaries when the insured person dies is
a. life insurance
b. health insurance
c. casualty insurance
d. property insurance

a. life insurance

A non-transferable savings product issued by the U.S. government that matures in a set period of time is the
a. S. treasury bill
b. S. treasury bond
c. municipal bond
d. S. savings bond

d. S. savings bond

A portfolio of investments that is weighted the same as a stock-exchange in order to mirror its performance is referred to as a(n)
a. index fund
b. mutual fund
c. equity fund
d. diversified fund

a. index fund

\__________ is a value-weighted index that is a reflection of broad sectors of the market.
a. S&P 500
b. NASDAQ
c. Over-the counter
d. NYSE

a. S&P 500

\_______ security certificates are issued in the brokerage firm's name but held in trust for its client, who actually owns the,
a. day trader
b. insured
c. market order
d. street name

d. street name

The lowest point in the business cycle is the
a. trough
b. peak
c. contraction
d. expansion

a. trough

The chance that a loss may occur is
a. pure risk
b. no risk
c. personal risk
d. probabiltiy

d. probabiltiy

The chance of loss or harm to personal or real property is referred to as
a. pure risks
b. liability risks
c. personal risks
d. property risks

d. property risks

A deposit account which may have transaction and balance restrictions but typically offers a competitive interest rate is a
a. money market account
b. index fund
c. corporate bond
d. municipal bond

a. money market account