The total return of a portfolio is influenced far more by specific security selection than asset allocation

• Question 1

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  	Mutual funds often sell directly to investors.
  	Selected Answer:  False Answers:  True False

• Question 2

  4.00000 out of 4.00000 points

  	You have been offered an opportunity to buy shares of a diversified collection of securities. You will be investing in
  	Selected Answer: c.  mutual funds. Answers: a.  stock opt ions. b.  bonds. c.  mutual funds. d.  common stock. e.  real estate.

• Question 3

  4.00000 out of 4.00000 points

  	Based on a retired person's needs, one should choose investments offering high current income with high risk.
  	Selected Answer:  False Answers: True  False

• Question 4

  4.00000 out of 4.00000 points

  	Investing is considered a short-term activity that involves the buying and selling of securities.
  	Selected Answer:  False Answers: True  False

• Question 5

  4.00000 out of 4.00000 points

  	During a bear market, security prices generally
  	Selected Answer: c.  decline in value Answers: a.  hold value b.  rapidly increase in value c.  decline in value d.  consolidate in value e.  remain neutral

• Question 6

  4.00000 out of 4.00000 points

  	Which of the following securities/investment acts regulates the sale of mutual fund shares?
  	Selected Answer: d.  The Investment Company Act of 1940 Answers: a.  The Sarbanes-Oxley Act of 2002 b.  The Securities and Protection Act of 1970 c.  The Securities Act of 1933 d.  The Investment Company Act of 1940 e.  the Securities and Exchange Act of 1934

• Question 7

  4.00000 out of 4.00000 points

  	The New York Stock Exchange is a dealer market.
  	Selected Answer:  False Answers: True  False

• Question 8

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  	Brokers charge a commission on security purchases as well as on security sales.
  	Selected Answer:  True Answers:  True False

• Question 9

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  	A round lot consists of multiples of 100 shares of stock.
  	Selected Answer:  True Answers:  True False

• Question 10

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  	Which of the following is an order to sell a stock when the market price drops to or below a specified level?
  	Selected Answer: a.  Stop-loss order Answers: a.  Stop-loss order b.  Market order c.  Day order d.  Limit order e.  Fill or kill order

• Question 11

  4.00000 out of 4.00000 points

  	During a bull market
  	Selected Answer: d.  prices go up. Answers: a.  prices remain stable. b.  investors are pessimistic. c.  cattle futures perform well. d.  prices go up. e.  prices go down.

• Question 12

  4.00000 out of 4.00000 points

  	You are covered through the SIPC for losses you incur due to the inept advice you receive from a brokerage firm.
  	Selected Answer:  False Answers: True  False

• Question 13

  4.00000 out of 4.00000 points

  	Selling equities you don't own and buying them back to cover the sale is
  	Selected Answer: b.  short selling in anticipation of a bear market in that security Answers: a.  a very safe investment activity. b.  short selling in anticipation of a bear market in that security c.  considered wise in a bull market. d.  going long. e.  discounting the market averages.

• Question 14

  4.00000 out of 4.00000 points

  	____ is a short-term investment activity.
  	Selected Answer: c.  Speculating in common stock Answers: a.  Investing in common stock b.  Buying life insurance c.  Speculating in common stock d.  Saving e.  Buying bonds

• Question 15

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  	When a brokerage house gives a margin call, you need to provide more collateral or your investment will be liquidated.
  	Selected Answer:  True Answers:  True False

• Question 16

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  	The Securities Investor Protection Corporation insures brokerage firm accounts up to
  	Selected Answer: c.  $500,000 per account and $100,000 in cash Answers: a.  $500,000 per account and $250,000 in cash b.  $1,000,000 per account and $500,000 in cash c.  $500,000 per account and $100,000 in cash d.  $500,000 per account and $250,000 in cash e.  $250,000 per account and $100,000 in cash

• Question 17

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  	The federal government regulates securities markets through the Securities and Exchange Commission.
  	Selected Answer:  True Answers:  True False

• Question 18

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  	The total return of a portfolio is influenced far more by specific security selection than asset allocation.
  	Selected Answer:  False Answers: True  False

• Question 19

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  	The bid price is the price paid by an investor for a stock.
  	Selected Answer:  False Answers: True  False

• Question 20

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  	The Maloney Act contains the so-called Volcker Rule, which prohibits depository banks from proprietary trading.
  	Selected Answer:  True Answers: True  False

• Question 21

  4.00000 out of 4.00000 points

  	A market order would be transacted at the
  	Selected Answer: c.  best price when the order is entered. Answers: a.  lowest price of the day. b.  highest price of the day. c.  best price when the order is entered. d.  limit price. e.  none of these.

• Question 22

  4.00000 out of 4.00000 points

  	Common stock generally allows the stockholder an equal vote in electing the management of the corporation.
  	Selected Answer:  True Answers:  True False

• Question 23

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  	Preferred stocks are the common stocks of ultra blue-chip companies.
  	Selected Answer:  False Answers: True  False

• Question 24

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  	Newly issued securities are sold to the public in the secondary market.
  	Selected Answer:  False Answers: True  False

• Question 25

  4.00000 out of 4.00000 points

  	____ is a portfolio characteristic which leads to reduced risk with good return.
  	Selected Answer: c.  Diversification Answers: a.  Stratification b.  Maturity c.  Diversification d.  Duration e.  Price-earnings ratio