311. Which of the following is not an important criterion to consider before investing?
312. Creating a portfolio by buying several different types of investments to spread the risk of
investing is called ______________.
313. Another term for portfolio strategy is:
314. When an investor purchases a security, the investor does so with the expectation of:
315. Online trading services target those investors who:
316. Which of the following measures how quickly an investor has access to his/her invested
funds, if they are needed?
317. Diversification means:
318. The risk/return trade-off investors assume means:
319. Michael and Kelly plan to invest in corporate securities. While Michael plans to retire next
year on his 65th birthday, Kelly is celebrating her first job after college and her 22nd birthday.
Which of the two investors would be well advised to choose a more conservative investment
strategy?
320. Alejandro relies on his stockbroker to execute his buy and sell orders for shares of stock
in different companies. He has found that the process of buying or selling a share of stock on a
major stock exchange normally takes:
321. Having just returned from serving with the U.S. Marines in Afghanistan, Callahan has
managed to save most of his earnings. He has enrolled in the local community college and he is
living in his parent’s lower level while he assimilates back into U.S. life. As his business major
friend, he has come to you for advice. He would like to see his $40,000 savings grow, yet he
knows that he will need it in about five years when he and his girlfriend are out of school and
make plans to get married. He also worries that his car may break down and he will need to
invest in another used car. Which of the following would you suggest for Callahan?
322. An investor who purchases stock in a company becomes a(n):
323. The market price of a share of common stock depends heavily on:
324. When an investor sells a security for more than the purchase price, the investor earns
a(n):
325. The term ________ refers to investors who anticipate increases in stock prices.
326. When stock prices decline steadily, investors refer to the market as a ________ market.
327. Stocks of corporations with earnings expected to increase faster than other stocks are
called ________ stocks.
328. Some analysts refer to ___________ stocks as issues that sell for less than $2 (others say
for less than $5).
329. Which of the following securities are historically considered high quality and usually pay
dividends?
330. Stocks offering investors a high dividend yield are called:
331. An investor places a ________ order with a broker to buy a particular stock at a specific
price, if and when that price becomes available.
332. An investor places a ________ order with a broker to sell a stock at the best price
available at that time.
333. Brokers prefer trading shares of a firm’s stock in multiples of 100, known as:
334. When corporations elect to issue two or more shares of stock to existing stockholders for
each share they currently own, they have initiated a(n) ________.
335. Which of the following describes the process where an investor borrows a percentage of
the purchase price of stocks from the brokerage firm?
336. What agency sets the margin rates for purchasing stock in the U.S.?
337. If a stock’s closing price for the day is 32.47, the stock’s price in U.S. dollars would be:
338. If an investor’s strategy is: “buy low, and sell high.” We could conclude that his optimism
regarding future stock price increases indicates that he is:
339. In the securities markets, capital gains take place when:
340. ________ stocks represent investments in emerging fields that have the potential to
realize better than average increases in the stock’s prices.
341. Which of the following is not an
odd lot
of stock?
342. Stock quotations are now available online. Which of the following pieces of information is
not likely to be on the stock quotation?
343. The stock of well-known, high-quality firms, such as Coca-Cola, General Electric, and
Procter & Gamble, fit the characteristics of ________ stocks, because investors can almost always
be assured a dividend and consistent stock price appreciation.
344. Corporations that want to attract more investors by lowering the selling price of their
common stock might consider declaring a:
345. Buying stock on margin allows an investor to borrow funds from the brokerage company
as part of the transaction. This __________ the potential return to the investor and ___________
the risk.
346. Cynthia plans to buy 100 shares of common stock in the Idaho Spud Corporation. She
willingly accepts the risk of this investment because she:
347. After buying 100 shares of common stock in the It’s All Good Corporation for $20 per
share, Popeye later sold the same shares for $25 per share. Popeye’s capital gain on the total
transaction is:
348. Samad wants to supplement his current investments with a high-risk, low-priced security.
Which of these best fits his strategy of high risk, low price and a potentially high rate of return?
349. Roberto directed his broker to buy 75 shares of New Mexico Technologies at the best
possible price available that day. These directions indicate that Roberto placed a ________ order
with his broker.
350. Realizing that Mississippi Industries stock currently sells for $35 a share, Juanita directed
her broker to buy 100 shares if and when the price dropped to $33. Juanita placed a ________
order with her broker.