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Exam 19: Using Securities Markets for Financing and Investing Opportunities

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Question 171

True/False

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In the Adapting to Change box, inaccuracies in robo-advisor algorithms have led more investors back to traditional financial advisors.

A) True
B) False

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Question 172

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Therese prefers corporate bonds as an investment option because investors always receive the face value of the bond whenever it is sold.

A) True
B) False

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Question 173

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Jacob impresses his friends by stating that he just cast four votes in the election of the board of directors of Epic Electronics, indicating that Jacob owns ________ stock in Epic Electronics.

Greg purchased 2,000 shares of common stock of the Rite Track Corporation last year. He learned several months later that the stock does not pay a dividend. Greg should proceed to

Through disciplined investing, Ella now owns 10% or 60,000 shares of PharmaONE. Although she has enjoyed a lot of control, she realizes that in order for the firm to acquire the funds to grow in a recessionary economy, it will need to issue more stock. Her regret is that it will dilute her ownership.

The market price of a share of common stock depends heavily on

Some analysts refer to ________ stocks as issues that sell for less than $2 (others say for less than $5) .

The advantage of using an online broker is that these services usually provide you with a wealth of information and help you allocate your assets. Sometimes they even help you create an investment plan for life!

The secondary market is where investors (both individuals and companies) go to find someone who is interested in selling their investments to them.

If a publicly traded corporation fails to maintain specific minimum requirements, the exchange can ________ the firm's securities.

Securities and Exchange Commission (SEC) rules prohibit the listing of the stock of foreign firms on U.S. stock exchanges.

From a risk standpoint, stocks are considered the riskiest investments, followed by mutual funds, preferred stock, and ETFs. Bonds represent a lower-risk investment.

Preferred stockholders have voting rights, privileges not shared by common stockholders.

Using information not available to the public to unfairly benefit in the stock market represents

Junk bonds are offered at higher interest rates than government bonds or corporate bonds with good ratings.

An investment that pools together investors' money in order to buy securities in many different companies or governments is a

Insider trading laws prevent employees from buying or selling the securities of their employers.

Brittany read about PharmaONE and wants to buy 100 common shares at $40 per share. Unfortunately, she only has $3,000 available to invest. One risky strategy Brittany could consider is

Discuss the role of investment bankers in the securities markets.

Victoria places a limit order at $48 and the stock currently sells for $61 per share, the broker will buy the stock for her.