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ECN Exam 4 |145 Questions| With Correct Solutions, Graded A+
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ECN Exam 4 |145 Questions| WithCorrect Solutions, Graded A+
What are the functions of securities markets? Answer - They provide long term
funding for businesses and a place for investors to buy and sell stocks and bonds
Taxes can affect which of the following areas of investing? Answer - interest, rental
income, dividends
Which of the following investments is a loan to a government or corporation?
Answer - bonds
When searching for information on investments, selective use of the _____________
is essential. Answer - internet
government bonds are considered an ________ safety, _______ risk investment
Answer - high low
Many radio and television stations broadcast _________ as part of their regular
news programs. Answer - investment and economic information
After making your investments, it is crucial to Blank______. Answer - monitor their
activity
Magazines such as Money, Kiplinger's Personal Finance, and similar periodicals
provide information and advice designed to improve your __ __. Answer -
investment skills
The consequences of _____________ must be considered when selling an
investment. Answer - taxes
Who requires the release of the prospectus for corporations selling new securities?
Answer - the federal government
What resource is essential for up-to-date investment information and investment
research? Answer - internet
Which of the following are subscription services that provide investment information
both online and in a print version? Answer - Value line, Mergent, Morningstar
Investment Reports
, An investment company that pools the money from many investors to invest in a
variety of securities is called a Blank______. Answer - mutual fund
Often listened to in a car and watched at home, and can be good sources to gather
information on investments. Answer - radio television
Which of the following are business periodicals that provide information and advice
designed to improve investment skills? Answer - Kiplinger's, BuisnessWeek, Money
When selling new securities, corporations must release all information regarding the
investment in a document known as a(n) _________ Answer - prospectus
Morningstar Investment Reports track thousands of ___ and issues reports on
safety, financial performance, and other important information that investors can use.
Answer - stocks and mutual funds
Business Week, Forbes, and Fortune magazines provide general news about the
overall __________ , and detailed financial information about specific corporations
Answer - economy
Assume that you purchased a corporate bond with a face value of $15,000. The
interest rate is 4.80 percent. What is the dollar amount of annual interest you will
receive each year? Answer - $720
Assume that at the beginning of the year, you purchase an investment for $5,900
that pays $90 annual income. Also assume the investment's value has increased to
$6,500 by the end of the year.
(A) What is the rate of return for this investment
(B) is it positive or negative
(6500 - 5900) = 600
600+90 = 690
= Answer - 11.69% (positive)
Beth and Bob Martin have total take-home pay of $2,600 a month. Their monthly
expenses total $2,300. Calculate the minimum amount this couple needs to establish
an emergency fund.
2300 x 3 (minimum) = Answer - $6900
Two years ago, you purchased 170 shares of IBM stock for $130 a share. Today,
you sold your IBM stock for $153 a share. For this problem, ignore commissions that
would be charged to buy and sell your IBM shares and dividends you might have
received as a shareholder.
(A) What is the amount of profit you earned on each share of IBM stock?
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