Which of the following is a primary disadvantage to investing in a hedge fund?
A. Hedge funds invest in only stocks
B. Hedge funds use advanced investment strategies
C. Illiquidity
D. Hedge funds invest in only bonds
E. Lax regulation
C. Illiquidity
Which of the following is true concerning the difference between simple and compound interest?
A. With compound interest, interest is earned only on the original investment whereas with simple interest, interest is earned on interest.
B. Simple interest a
C. With simple interest, interest is earned only on the original investment whereas with compound interest, interest is earned on both the original investment and the accumulated interest.
If you are buying a stock, which of the following ask prices is the most attractive?
A. 10.75-10.90
B. 10.72-10.87
C. 10.71-10.86
D. 10.77-10.91
E. 10.70-10.83
E. 10.70-10.83
Ms. Awesome needs $1,000,000 upon retirement in 10 years to live comfortably. She can invest $75,000 a year to her retirement. What interest rate would her investment need to earn in order for her to meet her goals?
A. 6.2%
B. 2.7%
C. 7.9%
D. 16.9%
E. Thi
A. 6.2%
Suppose your investment returns are taxed at a 20% rate. If you invest $100,000 today and expect to earn a rate of return of 6%, what will your investment be worth in 20 years?
A. $320,713
B. $142,874
C. $106,000
D. $255,403
E. $104,200
D. $255,403
What interest rate would you have to earn if you wanted to triple an investment in 10 years?
A. 10.0%
B. 15.6%
C. 20.0%
D. 4.4%
E. 11.6%
E. 11.6%
According to the financial life cycle, which of the following is usually the first source of OUTSIDE capital that a business uses to finance its growth?
A. Venture capital
B. Equity offerings
C. Bond offerings
D. Bank financing
E. Private equity
D. Bank financing
What is the following is true about the S&P 500?
A. The largest sector in the S&P 500 is the financial sector
B. The S&P 500 is the best known stock market index
C. The S&P 500 weights stocks by their market price
D. The S&P 500 is composed of the 500 com
E. The S&P 500 weights stocks by their market value
Which of the following transactions would take place in the primary securities market?
A. An investor buys an IPO stock through an investment bank.
B. An investor buys a stock from another investor.
C. An institution buys a stock from another institution.
A. An investor buys an IPO stock through an investment bank.
Robert and Rosie both invested $7,500 four years ago. They both earned a 15% return, however Robert earned a simple return of 15% and Rosie earned a compounded return of 15%. How did this difference in compounding affect their investments' value today?
A.
B. Rosie will have $1,117.55 more than Robert
What is one of the primary roles of the SEC?
A. To eliminate pricing efficiency in the markets
B. To provide investors with disclosure of material information about private companies
C. To protect investors from securities fraud
D. To facilitate operation
C. To protect investors from securities fraud
A Red Herring is ______________
A.the underwriter's option to sell 15% more shares at offering price
B. an advertisement about an upcoming IPO
C. the preliminary prospectus provided to investors before the IPO
D. the underwriter's option to sell 25% more
C. the preliminary prospectus provided to investors before the IPO
Which of the following is TRUE regarding financial institutions?
A. Insurance companies fund about 95% of their assets with debt
B. Investment companies take deposits and lend the money at a higher interest rate
C. The primary revenues sources for insuran
C. The primary revenues sources for insurance companies are insurance premiums and the income from investments that insurance companies earn by investing this premium income.
Financial institutions on the Buy Side buy, hold, and trade financial products.
A. True
B. False
A. True
Which of the following actions is illegal insider trading?
A.Employees buy stock in their company after the CEO tells them non-public information.
B. An employee buys stock in his company one week after the company releases its quarterly earnings.
C. Clie
A.Employees buy stock in their company after the CEO tells them non-public information.
Which of the following statements about financial institutions is true?:
A. The three general types of mutual funds include money market funds, bond funds, and stock funds.
B. An investment company's primary source of funds is shares and its primary use o
A. The three general types of mutual funds include money market funds, bond funds, and stock funds.
If you plan to save $14,000 every year for retirement for 20 years. Assuming that you earn an 8.5% return on your investment, compounded annually, how much money will you have when you retire?
A. $137,454
B. $230,987
C. $302,400
D. $677,278
E. $642,453
D. $677,278
What is true about the designated market maker?
A. The primary role of the designated market maker is to hold inventory and to buy and sell shares
B. The designated market maker reports to the specialist on the trading floor
C. The designated market maker
A. The primary role of the designated market maker is to hold inventory and to buy and sell shares
Which of the following is true about Secondary Offerings?
A. It sends a positive signal to investors and thus increases the stock price
B. It is related to issuing shares before a company goes public
C. It is a way of issuing debt to generate capital for
D. It usually leads to decrease in stock prices
If an investment's interest is compounded annually rather than semi-annually, what will be the result on the interest earned from the investment?
A. The annual compounding investment will earn twice as much interest as the semi-annual compounding investme
D. The annual compounding investment will earn less interest because interest will be earned on previous interest payments less often
Which of the following is a factor that promotes well-functioning financial markets?
A. Market players do not bear the consequences of their decisions.
B. Contracts are not easily enforceable.
C. Property rights are unprotected.
D. Borrowers and investors
E. Financial statements are transparent.
Which of the following is TRUE about Venture Capital Financing?
A. IPOs backed by Venture Capital have higher long-term returns
B. Upon successful IPO, first round VC gets lower return than later stage VC
C. VC firms get positive returns from all their in
A. IPOs backed by Venture Capital have higher long-term returns
Which of the following statements about the Financial Life Cycle is true?
A. The Long-Term (3-year) adjusted performance of IPO's is positive
B. IPO's are generally overpriced as first day returns are typically negative
C. Stock prices always increase at
D. Early stage VC investors (A-round) typically expect higher returns than later VC investors (C-Round)
Bob has a goal to buy a $1.2 million beach house in 10 years. If he expects to make a 7% annual return, how much does he need to invest today to buy his beach house in 10 years?
A. $720,000.00
B. $610,019.15
C. $677,368.72
D. $191,041.55
E. $112,800.00
B. $610,019.15
Which of the following is true regarding the stock and debt markets?
A. The stock market is larger than the bond market
B. The stock market represents the base cost of capital
C. The debt market is used to measure the health of the economy
D. Investors se
E. Investors seeking higher returns invest in stocks
Which will be worth more in 15 years:
$150 invested today at a rate of 9%
$12 invested every year at a rate of 11%
A. The $150 invested today will be worth $133.51 more in 15 years
B. The $12 invested every year will be worth $133.51 more in 15 years
C. T
A. The $150 invested today will be worth $133.51 more in 15 years
What is your ending balance using compound interest of an investment of $2,300 with an interest rate of 5% after 12 years?
A. $4,130.47
B. $3,404.00
C. $28,704.00
D. $234,920.00
E. $4,426.09
A. $4,130.47
You plan to invest $15,000 in a Roth IRA (tax free). You expect to earn 10% per year. How much money will you have at age 50 if you are 40? (rounded to the nearest number)
A. $15,737
B. $56,189
C. $80,000
D. $85,600
E. $38,906
E. $38,906
Which of the following is true concerning the difference between simple and compound interest?
A. With compound interest, interest is earned only on the original investment whereas with simple interest, interest is earned on interest.
B. Simple interest a
D. With simple interest, the assumption is that interest earned on the original investment is not reinvested. With compound interest, interest is reinvested.
If you are selling a stock, which of the following bid prices is the most attractive?
A. 40.60-41.05
B. 40.62-41.07
C. 40.61-41.06
D. 40.67-41.12
E. 40.64-41.01
D. 40.67-41.12
Mr. Wonderful needs $2,000,000 upon retirement in 10 years to live comfortably. He can invest $100,000 a year to his retirement. What interest rate would his investment need to earn in order for him to meet his goals?
A. 4.8%
B. 13.7%
C. 14.7%
D. 23.7%
E.
C. 14.7%
Suppose your investment returns are taxed at a 25% rate. If you invest $10,000 today and expect to earn a rate of return of 6%, what will your investment be worth in 10 years?
A. $15,530
B. $14,802
C. $11,046
D. $10,400
E. $10,300
A. $15,530
What is the following is true about the Dow Jones Industrial Average (DJIA)?
A. Apple is the biggest stock in the DJIA
B. The DJIA includes 500 stocks
C. The DJIA is a broad measure of the performance of U.S. stocks
D. The DJIA is a market-value weighted
E. The DJIA weights stocks by their market price
Which of the following transactions would take place in the secondary securities market?
A. An investor buys a stock from another investor.
B. An investor buys an IPO stock through an investment bank.
C. An investor buys a secondary offering stock from th
A. An investor buys a stock from another investor.
A Green Shoe is_________________
A. the preliminary prospectus provided to the SEC before the IPO
B. an advertisement about an upcoming IPO
C. the underwriter's option to sell 15% more shares at offering price
D. the date that the company files the IPO
E.
C. the underwriter's option to sell 15% more shares at offering price
Which of the following is TRUE regarding investment intermediaries?
A. Insurance Companies can be both "buy side" and "sell side" institutions
B. Investment banks fund their assets primarily by selling shares
C. The risk associated with bond funds general
C. The risk associated with bond funds generally falls between the risks associated with stock and money market funds.
Which of the following actions is illegal insider trading?
A. Friends of a CEO sell stock in the company after the CEO tells them material information unavailable to others.
B. An employee buys stock in his company one week after the company releases its
A. Friends of a CEO sell stock in the company after the CEO tells them material information unavailable to others.
Which of the following statements about financial institutions is true?:
A. An investment company's primary source of funds is loans and its primary use of funds is securities
B. An investment company's primary source of funds is shares and its primary us
C. Stock funds or equity funds involve more risk than money market or bond funds.
If you plan to save $9,800 every year for retirement for 10 years. Assuming that you earn a 9% return on your investment, compounded annually, how much money will you have when you retire?
A. $313,747
B. $100,682
C. $130,023
D. $148,890
E. $320,460
D. $148,890
Which of the following is a factor that promotes well-functioning financial markets?
A. Contracts are not easily enforceable.
B. Property rights are unprotected.
C. Borrowers and investors are accountable.
D. Financial statements are not transparent.
E. M
C. Borrowers and investors are accountable.
Which of the following statements about the Financial Life Cycle is true?
A. The Long-Term (3-year) adjusted performance of IPO's is positive
B. IPO's are generally overpriced as first day returns are typically negative
C. Stock prices always increase at
E. Access to capital markets is one of the primary reasons for a company to issue an IPO
What is your ending balance using compound interest of an investment of $1,550 with an interest rate of 7.0% after 10 years?
A. $3,049.08
B. $2,480.00
C. $16,340.00
D. $5,745.34
E. $5,087.64
A. $3,049.08
Which of the following is a primary disadvantage to investing in a hedge fund?
A. Hedge funds invest in only stocks
B. Hedge funds use advanced investment strategies
C. Illiquidity
D. Hedge funds invest in only bonds
E. Lax regulation
C. Illiquidity
Which of the following is true concerning the difference between simple and compound interest?
A. With compound interest, interest is earned only on the original investment whereas with simple interest, interest is earned on interest.
B. Simple interest a
C. With simple interest, interest is earned only on the original investment whereas with compound interest, interest is earned on both the original investment and the accumulated interest.
If you are buying a stock, which of the following ask prices is the most attractive?
A. 10.75-10.90
B. 10.72-10.87
C. 10.71-10.86
D. 10.77-10.91
E. 10.70-10.83
E. 10.70-10.83
Ms. Awesome needs $1,000,000 upon retirement in 10 years to live comfortably. She can invest $75,000 a year to her retirement. What interest rate would her investment need to earn in order for her to meet her goals?
A. 6.2%
B. 2.7%
C. 7.9%
D. 16.9%
E. Thi
A. 6.2%
Suppose your investment returns are taxed at a 20% rate. If you invest $100,000 today and expect to earn a rate of return of 6%, what will your investment be worth in 20 years?
A. $320,713
B. $142,874
C. $106,000
D. $255,403
E. $104,200
D. $255,403
What interest rate would you have to earn if you wanted to triple an investment in 10 years?
A. 10.0%
B. 15.6%
C. 20.0%
D. 4.4%
E. 11.6%
E. 11.6%
According to the financial life cycle, which of the following is usually the first source of OUTSIDE capital that a business uses to finance its growth?
A. Venture capital
B. Equity offerings
C. Bond offerings
D. Bank financing
E. Private equity
D. Bank financing
What is the following is true about the S&P 500?
A. The largest sector in the S&P 500 is the financial sector
B. The S&P 500 is the best known stock market index
C. The S&P 500 weights stocks by their market price
D. The S&P 500 is composed of the 500 com
E. The S&P 500 weights stocks by their market value
Which of the following transactions would take place in the primary securities market?
A. An investor buys an IPO stock through an investment bank.
B. An investor buys a stock from another investor.
C. An institution buys a stock from another institution.
A. An investor buys an IPO stock through an investment bank.
Robert and Rosie both invested $7,500 four years ago. They both earned a 15% return, however Robert earned a simple return of 15% and Rosie earned a compounded return of 15%. How did this difference in compounding affect their investments' value today?
A.
B. Rosie will have $1,117.55 more than Robert
What is one of the primary roles of the SEC?
A. To eliminate pricing efficiency in the markets
B. To provide investors with disclosure of material information about private companies
C. To protect investors from securities fraud
D. To facilitate operation
C. To protect investors from securities fraud
A Red Herring is ______________
A.the underwriter's option to sell 15% more shares at offering price
B. an advertisement about an upcoming IPO
C. the preliminary prospectus provided to investors before the IPO
D. the underwriter's option to sell 25% more
C. the preliminary prospectus provided to investors before the IPO
Which of the following is TRUE regarding financial institutions?
A. Insurance companies fund about 95% of their assets with debt
B. Investment companies take deposits and lend the money at a higher interest rate
C. The primary revenues sources for insuran
C. The primary revenues sources for insurance companies are insurance premiums and the income from investments that insurance companies earn by investing this premium income.
Financial institutions on the Buy Side buy, hold, and trade financial products.
A. True
B. False
A. True
Which of the following actions is illegal insider trading?
A.Employees buy stock in their company after the CEO tells them non-public information.
B. An employee buys stock in his company one week after the company releases its quarterly earnings.
C. Clie
A.Employees buy stock in their company after the CEO tells them non-public information.
Which of the following statements about financial institutions is true?:
A. The three general types of mutual funds include money market funds, bond funds, and stock funds.
B. An investment company's primary source of funds is shares and its primary use o
A. The three general types of mutual funds include money market funds, bond funds, and stock funds.
If you plan to save $14,000 every year for retirement for 20 years. Assuming that you earn an 8.5% return on your investment, compounded annually, how much money will you have when you retire?
A. $137,454
B. $230,987
C. $302,400
D. $677,278
E. $642,453
D. $677,278
What is true about the designated market maker?
A. The primary role of the designated market maker is to hold inventory and to buy and sell shares
B. The designated market maker reports to the specialist on the trading floor
C. The designated market maker
A. The primary role of the designated market maker is to hold inventory and to buy and sell shares
Which of the following is true about Secondary Offerings?
A. It sends a positive signal to investors and thus increases the stock price
B. It is related to issuing shares before a company goes public
C. It is a way of issuing debt to generate capital for
D. It usually leads to decrease in stock prices
If an investment's interest is compounded annually rather than semi-annually, what will be the result on the interest earned from the investment?
A. The annual compounding investment will earn twice as much interest as the semi-annual compounding investme
D. The annual compounding investment will earn less interest because interest will be earned on previous interest payments less often
Which of the following is a factor that promotes well-functioning financial markets?
A. Market players do not bear the consequences of their decisions.
B. Contracts are not easily enforceable.
C. Property rights are unprotected.
D. Borrowers and investors
E. Financial statements are transparent.
Which of the following is TRUE about Venture Capital Financing?
A. IPOs backed by Venture Capital have higher long-term returns
B. Upon successful IPO, first round VC gets lower return than later stage VC
C. VC firms get positive returns from all their in
A. IPOs backed by Venture Capital have higher long-term returns
Which of the following statements about the Financial Life Cycle is true?
A. The Long-Term (3-year) adjusted performance of IPO's is positive
B. IPO's are generally overpriced as first day returns are typically negative
C. Stock prices always increase at
D. Early stage VC investors (A-round) typically expect higher returns than later VC investors (C-Round)
Bob has a goal to buy a $1.2 million beach house in 10 years. If he expects to make a 7% annual return, how much does he need to invest today to buy his beach house in 10 years?
A. $720,000.00
B. $610,019.15
C. $677,368.72
D. $191,041.55
E. $112,800.00
B. $610,019.15
Which of the following is true regarding the stock and debt markets?
A. The stock market is larger than the bond market
B. The stock market represents the base cost of capital
C. The debt market is used to measure the health of the economy
D. Investors se
E. Investors seeking higher returns invest in stocks
Which will be worth more in 15 years:
$150 invested today at a rate of 9%
$12 invested every year at a rate of 11%
A. The $150 invested today will be worth $133.51 more in 15 years
B. The $12 invested every year will be worth $133.51 more in 15 years
C. T
A. The $150 invested today will be worth $133.51 more in 15 years
What is your ending balance using compound interest of an investment of $2,300 with an interest rate of 5% after 12 years?
A. $4,130.47
B. $3,404.00
C. $28,704.00
D. $234,920.00
E. $4,426.09
A. $4,130.47
You plan to invest $15,000 in a Roth IRA (tax free). You expect to earn 10% per year. How much money will you have at age 50 if you are 40? (rounded to the nearest number)
A. $15,737
B. $56,189
C. $80,000
D. $85,600
E. $38,906
E. $38,906
Which of the following is true concerning the difference between simple and compound interest?
A. With compound interest, interest is earned only on the original investment whereas with simple interest, interest is earned on interest.
B. Simple interest a
D. With simple interest, the assumption is that interest earned on the original investment is not reinvested. With compound interest, interest is reinvested.
If you are selling a stock, which of the following bid prices is the most attractive?
A. 40.60-41.05
B. 40.62-41.07
C. 40.61-41.06
D. 40.67-41.12
E. 40.64-41.01
D. 40.67-41.12
Mr. Wonderful needs $2,000,000 upon retirement in 10 years to live comfortably. He can invest $100,000 a year to his retirement. What interest rate would his investment need to earn in order for him to meet his goals?
A. 4.8%
B. 13.7%
C. 14.7%
D. 23.7%
E.
C. 14.7%
Suppose your investment returns are taxed at a 25% rate. If you invest $10,000 today and expect to earn a rate of return of 6%, what will your investment be worth in 10 years?
A. $15,530
B. $14,802
C. $11,046
D. $10,400
E. $10,300
A. $15,530
What is the following is true about the Dow Jones Industrial Average (DJIA)?
A. Apple is the biggest stock in the DJIA
B. The DJIA includes 500 stocks
C. The DJIA is a broad measure of the performance of U.S. stocks
D. The DJIA is a market-value weighted
E. The DJIA weights stocks by their market price
Which of the following transactions would take place in the secondary securities market?
A. An investor buys a stock from another investor.
B. An investor buys an IPO stock through an investment bank.
C. An investor buys a secondary offering stock from th
A. An investor buys a stock from another investor.
A Green Shoe is_________________
A. the preliminary prospectus provided to the SEC before the IPO
B. an advertisement about an upcoming IPO
C. the underwriter's option to sell 15% more shares at offering price
D. the date that the company files the IPO
E.
C. the underwriter's option to sell 15% more shares at offering price
Which of the following is TRUE regarding investment intermediaries?
A. Insurance Companies can be both "buy side" and "sell side" institutions
B. Investment banks fund their assets primarily by selling shares
C. The risk associated with bond funds general
C. The risk associated with bond funds generally falls between the risks associated with stock and money market funds.
Which of the following actions is illegal insider trading?
A. Friends of a CEO sell stock in the company after the CEO tells them material information unavailable to others.
B. An employee buys stock in his company one week after the company releases its
A. Friends of a CEO sell stock in the company after the CEO tells them material information unavailable to others.
Which of the following statements about financial institutions is true?:
A. An investment company's primary source of funds is loans and its primary use of funds is securities
B. An investment company's primary source of funds is shares and its primary us
C. Stock funds or equity funds involve more risk than money market or bond funds.
If you plan to save $9,800 every year for retirement for 10 years. Assuming that you earn a 9% return on your investment, compounded annually, how much money will you have when you retire?
A. $313,747
B. $100,682
C. $130,023
D. $148,890
E. $320,460
D. $148,890
Which of the following is a factor that promotes well-functioning financial markets?
A. Contracts are not easily enforceable.
B. Property rights are unprotected.
C. Borrowers and investors are accountable.
D. Financial statements are not transparent.
E. M
C. Borrowers and investors are accountable.
Which of the following statements about the Financial Life Cycle is true?
A. The Long-Term (3-year) adjusted performance of IPO's is positive
B. IPO's are generally overpriced as first day returns are typically negative
C. Stock prices always increase at
E. Access to capital markets is one of the primary reasons for a company to issue an IPO
What is your ending balance using compound interest of an investment of $1,550 with an interest rate of 7.0% after 10 years?
A. $3,049.08
B. $2,480.00
C. $16,340.00
D. $5,745.34
E. $5,087.64
A. $3,049.08