Question 1

Miklos has a mutual fund that includes long-term municipal bonds,corporate bonds,and common stocks with good dividend-paying records.Miklos' fund is emphasizing

Accepted Answer

high current income.

Question 2

Suppose that in June 2013 you bought a call option that allows you to buy 100 shares of a certain stock for $20 before October 2013.If the market price of the stock at some point before October 2013 is $23,and you exercise your option,what will happen?

Accepted Answer

You will make a $300.
00 profit.

Question 3

________ is the proportion of funds invested in each of several investment alternatives.

Accepted Answer

Asset allocation

Question 4

A(n)________ is a summary of price trends in a specific industry and/or the stock market as a whole.

Accepted Answer

market index

Question 5

A ________ is the right to buy a particular stock at a certain price until a particular date,while a ________ gives the owner the right to sell a particular stock at a specified price until a particular date.

Accepted Answer

call option; put option

Question 6

A stock quote of 30.5 means

Accepted Answer

the stock is selling at $30.
50 per share.

Question 7

Which of the following is correct with regard to hedge funds?

Accepted Answer

Hedge funds are not as closely regulated as mutual funds.

Question 8

Assume you bought a $1000 par-value bond in 2004 for 75 1/4 with an interest rate of 7.5%.If you held the bond until maturity in 2014,what would be the total amount that you would earn on this bond?

Accepted Answer

$997.
50

Question 9

Jan owns a mutual fund that invests in new companies and even troubled companies and other high-risk securities.Jan's mutual fund is emphasizing

Accepted Answer

aggressive growth.

Question 10

________ would be most likely for a mutual fund with a "safety" strategy.

Accepted Answer

Treasury bills

Question 11

________ are private pools of money that try to give investors a positive return regardless of stock market performance,and often engage in practices like short-selling and leveraging.

Accepted Answer

Hedge funds

Question 12

Mike owns a mutual fund that includes a balance of bonds,preferred stocks,and common stocks,especially the common stocks of established firms.His mutual fund is emphasizing

Accepted Answer

growth.

Question 13

Which of the following is correct with regard to mutual funds?

Accepted Answer

A mutual fund that stresses safety of investment would likely invest in treasury bills.

Question 14

If a stock option is "under water," what does that mean?

Accepted Answer

The market price of the stock that the option applies to is lower than the option price.

Question 15

Don has an agreement to purchase a specified amount of a commodity at a given price on a set future date.Don has a

Accepted Answer

futures contract.

Question 16

Suppose you have a put option that allows you to sell 100 shares of Alcan for $54.50 per share any time before October 2013.If the stock price falls to $45.00 per share,your profit is

Accepted Answer

$950.
00

Question 17

The ________ is the percentage of the total sales price that a buyer must put up to place an order for a stock or a futures contract.

Accepted Answer

margin

Question 18

Which investment has the greatest risk?

Accepted Answer

Futures contracts in the commodities market

Question 19

If the stock of Vogue Cosmetics were reported in The Globe and Mail as selling for 24.50,you would have to pay ________ per share.

Accepted Answer

$24.
50

Question 20

Exchange-traded funds

Accepted Answer

have lower operating expenses than mutual funds.

Quiz 19: Understanding Securities and Investments