1) An increase in the riskfree rate will tend to decrease stock prices.
2) The payout ratio is dividends divided by earnings.
3) Selling a covered call option is comparable to selling a stock short.
4) Corporate retained earnings are taxed on the individual investor’s federal income
form.
5) The shares of load mutual fund sell for a discount from their net asset value.
6) The investor should specify the goals of investing.
7) Debentures are secured by equipment.
8) A price increase on small volume is more bullish than a price increase on large
volume since fewer investors bought the stock.
9) A call feature will have no impact on the value of a bond if interest rates rise.
10) Investors may reduce risk by constructing diversified portfolios but not eliminate
risk.
11) As a result of arbitrage, ETFs tend to sell for their net asset value.
12) Writing both a put and a call at the same strike price and expiration date is an
illustration of a straddle.
13) High tax efficiency suggests that a funds after-tax return is comparable to its
before-tax return.
14) Margin is required only of those investors who take long positions in futures
contracts.
15) Investors and speculators rarely have an opportunity to establish an arbitrage
position.
16) Studies of realized rates of return assume that Dividend income is not reinvested.