Exam 4 answers
Terms in this set (34)
the largest market where existing securities are sold is called the ____ market
growth stocks tend to pay ____ dividends and have ____ appreciation of stock prices
income stocks tend to pay _____ dividends and have ____ appreciation of stock prices.
if you purchase 100 shares of Ajax Corporation for $15 a share and one year later sell it for $20 a share, what was your return if the stock paid $2 per share dividends? (ignore commissions and trading fees)
a stock's ____ is a measure of the degree of volatility in a stock's returns over time
if you have $100 to invest, but will need the money in one month to pay bills, you should
put the money in a money market savings account
the stock exchange with the most stringent listing requirements is the
computer systems that match up purchases and sales of stocks even at night when the other exchanges are closed are
electronic communication networks
you bought IBM stock at $70 per share. it is not $120 a share. you think it could go higher but you are nervous that it could go down and you would lose your gains. to protect your gains but still give yourself the chance to make future profits you could place a
sell stop order at $100 a share
the ___ shows the firm's operating results over a period of time
which of the following features of a bond could result in the company never paying out cash to redeem the bonds
if a company anticipates a substantive decline in interest rates in the future, which of the following are the likely to include in a bond
ginnie mae is an example of a bond issued by
an agency of the federal government
refer to the table 16.1 how much would a $1000 par value ATT bond cost as of the day of this listing?
the relation between a bond's price and the yield to maturity
a 20-year bond has a coupon rate of 6% annually and a principal of $1000. alternative bonds are paying a rate of 5%. what is the value of the bonds?
when you select bonds based on the expectation that interest rates will decline, you are using ____ strategy
advantages of investing in mutual funds include all of the following except
there is virtually no risk of loss
a family of mutual funds is
a number of funds with different objectives operated by one investment company
on average, actively managed mutual funds have an expense ratio of about
____ funds are mutual funds that attempt to mirror the movements of existing broad market indicators.
high yield (junk) bond funds focus on relatively risky bonds issued by firms that are subject to
a mutual fund has a beginning balance of $100 million, earns interest of $10million, receives dividends of $15 million, and has expenses of $5million. if $10million shares are outstanding, what is the NAV
if a mutual fund's NAV is $50 and its expense ratio is 2.0%, what are the total expenses per share?
the objective of asset allocation is
to achieve a desired return on an investment and maintain a tolerable risk level.
the primary benefit of diversification is that is
reduces the exposure of your investments to adverse effects of any individual investment
a portfolio can reduce risk when its
investments do not move in tandem
to reduce your risk, you should select stocks who returns exhibit a ____ positive correlation rather than a ____ positive correlation.
when investing outside the united states, stocks are typically ____ U.S.-based stocks
more volatile than
prices are not directly influenced by stock market conditions
a call option is purchased for a premium of $400. the current price of the stock is $42 per share and the exercise price is $44 per share. the option is exercised when the stock is selling for $50 per share. what would be your return on the option if after exercising it, you immediately sold the stock at the market price of $50 per share?
pooled funds that invest in real estate
as you near retirement, you should allocate a substantial portion of your portfolio to ____ to reduce volatility
if you find yourself checking the prices of stocks in your portfolio on an hourly basis and you are not a day trader, the most likely cause is
the low risk tolerance you have to owning stock.