W!SE Investing Review

Robyn is an investor. Which financial product makes her a shareholder in a corporation?

Bonds

Certificate of deposit

Common stocks

Bond mutual funds

The process of setting aside money and putting it to work by having it earn interest or dividends or gain value in the equities market with the idea of having additional funds to use in the future is described as:

Saving and investing

Making money

Setting goals

Diversifying

Jane owns common stock, a corporate bond, shares in two mutual funds, and a U.S. Treasury note. All of these together are called her

Retirement holdings

Net worth

Portfolio

Investment package

Erika and Mark received an inheritance of $100,000. They plan to invest their inheritance money to buy a house in six years. Which of the following carries the greatest risk?

Savings accounts

Common stocks

Bonds

Regular checking accounts

What is the largest equities market in the world?

American Stock Exchange (AMEX)

NASDAQ market

New York Stock Exchange (NYSE)

Over-the-counter (OTC) market

Buying a treasury bill (T-bill) is best for investors who are looking for

Answer A a place to invest between $100-$500.

Answer B a secure, low risk investment.

Answer C a higher yield on their investment than corporate bonds offer.

Answer D an investment that matures in 10-30 years.

Before the Kiss Corporation can issue stocks or bonds, it must register the issue with:

Its Board of Directors

The Federal Reserve

The World Bank

The Securities and Exchange Commission (SEC)

The interest earned on United States Series EE Savings Bonds is

Exempt from state and local taxes.

Paid in a lump sum at the time the face value on the bond is reached

Equal to the money paid to purchase it.

Deducted at the time of the bond's purchase.

A pharmacy is to drugs as the American Stock Exchange is to:

Interest

Stock advisors

Securities

Mutual funds

A person owns a stock that pays a $2.00 a share dividend. If the person chooses to reinvest that dividend, this means that the $2.00 will go toward buying

More of the same stock.

Stocks that are similar to those already owned.

Preferred stock in the corporation.

Bonds in the corporation.

Using a brokerage firm, a qualified investor buys 1000 shares of a common stock at $50 a share on 50% margin. This means that the

Investor will pay only $5000 for the shares.

Investor is buying 2000 shares.

Brokerage firm is lending the investor 50% of the money.

Brokerage firm will own 50% of the 1000 shares of stock that were purchased.

As an investment, a person decides to buy a small house that has three rental apartments. The profits from this investment may be lower then expected if the

Tenant in an apartment decides to paint the hallways.

Mortgage on the house is paid off.

Taxes on the house are lowered.

One of the apartments is not rented.

An investor bought 40 shares of ABC corporation's stock at $80 a share. Two weeks later, the investor receives notice that the corporation has approved a 2-for-1 stock split. Based on this information, the investor would own at the moment of the split

20 shares of the stock and the price of each share is $80.

40 shares of the stock and the price of each share is $40.

80 shares of the stock and the price of each share is $40.

80 shares of the stock and the price of each share is $80.

When is there high risk for a stock to become worthless?

The financial markets are fluctuating

The interest rates are decreasing

The business that issued the stock is about to declare bankruptcy

Market stock prices are increasing

The federal agency that regulates the securities industry is the:

Federal Trade Commission

Department of Commerce

Securities and Exchange Commission

Federal Reserve

Municipal bonds are:

Issued by investment firms

Issued by local governments to raise money for roads, bridges and other construction projects

Guarantee high dividends to bondholders

A tax to raise to raise money for city operations

Robyn is an investor. Which financial product makes her a shareholder in a corporation?

Bonds

Certificate of deposit

Common stocks

Bond mutual funds

A publicly held corporation announces it is planning to merge with another publicly held corporation. Based on this information, an investor should be aware that the price of the stock

Will stay the same.

Will rise.

Is likely to fall.

Is unpredictable.

George received a dividend from the company in which he is a stockholder. A dividend is:

Profit from the sale of some of his shares of stock

Distribution of part of the company's profit

Required by the SEC to be given to shareholders

Interest on his shares of preferred stock

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