1) Convertible bonds tend to sell for a premium over their value as stock.
2) A unit trust is a passive investment that holds a fixed portfolio of securities such as
federal government bonds.
3) During a rising market, stocks with greater beta coefficients may be preferred.
4) The margin requirement sets the maximum cash investment the individual investor
must make.
5) Managements are often reluctant to reduce dividends because reductions may be
viewed as indicating financial weakness.
6) Bid and ask price quotations for overthecounter stocks are available through the
NYSE.
7) A Keogh plan is a pension plan for an individual not covered by a pension plan at
place of employment.
8) If the first payment made by an annuity is today, that
is an ordinary annuity and not an annuity due.
9) A point-and-figure chart such as an X-O chart tracks dividends and earnings.
10) Put-call parity suggests that the sum of the prices of a stock, a call and a put on that
stock, and a debt instrument maturing at the expiration of the options must equal zero.
11) Distributions from an investment company may include earnings and capital gains.
12) Treasury bonds may be bought and sold in the secondary markets like corporate
bonds.
13) Since options offer potential leverage, they tend to sell for a time premium.
14) Writing covered call options is more risky than writing naked call options
15) A call penalty is a payment made to the firm to encourage early retirement of the
bond.