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Exam 19: Using Securities Markets for Financing and Investing Opportunities

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Question 131

Multiple Choice

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Yolanda has an ownership interest in many different companies,yet she owns the shares of stock of just one organization.Yolanda undoubtedly owns shares in a(n) :

A) investment trust.
B) security account.
C) options association.
D) mutual funD.

E) A) and B)
F) C) and D)

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Question 132

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Preferred stock may include callable and convertible provisions.

A) True
B) False

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Question 133

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Debenture bonds represent bonds that are not secured by collateral.

Stocks of corporations with earnings expected to increase faster than other stocks are called ________ stocks.

What agency sets the margin rates for purchasing stock in the U.S.?

An investor places a ________ order with a broker to sell a stock at the best price available at that time.

As interest rates increase,bond prices fall.

Preemptive rights provide common stockholders the first right to purchase any new shares of common stock issued by the firm.

Ebony Enterprises decides to pay off its bonds several years before the maturity date.Apparently,the bonds _____________.

Ken owns 100 shares in XYZ Company,currently selling for $60 per share.His stock split yesterday 3-for-1.The number of shares that Ken owns has tripled.

Buying a stock makes the investor an owner in the firm.

If a stock's closing price for the day is 32.47,the stock's price in U.S.dollars would be:

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) ________.

Six years ago,Angie invested $50,000 that she inherited from her grandfather into a growth stock mutual fund.Each share of the fund cost $22/share.Yesterday,she perused a mutual fund quote on the Internet.The quotation showed 1) Year To Date Return;2) Yield;3) Net Asset Value;4) Previous Close.Which of these will provide her with an indication of the present price per share she can expect to realize if she calls her broker tomorrow morning and asks her to sell the shares?

Securities markets help companies raise long-term debt and equity financing.

When comparing the investments of different mutual funds,little variation in the risk level exists.

__________ represents the most basic form of company ownership and includes voting rights and dividends,if and when the firm elects to pay dividends.

Which of the following terms best describes the relationship between the New York Stock Exchange and the NASDAQ?

The cost of a firm borrowing money is called the:

Regis and Kelly plan to invest in corporate securities.While Regis plans to retire next year on his 65^th birthday,Kelly is celebrating her first job after college and her 22^nd birthday.Which of the two investors would be well advised to choose a more conservative investment strategy?