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Finan 520 Exam 1
Finan 520 Exam 1 chapter 3-5
| Question | Answer |
|---|---|
| Transactions that do not involve the original issue of securities take place in __________ | Secondary Markets |
| All major stock markets today are effectively __________ | Electronic Trading Systems |
| Which one of the following invests in a portfolio that is fixed for the life of the fund? | Unit Investment Trust |
| A contingent deferred sales load is commonly called a __________ | Back- End load |
| The primary measurement unit used for assessing the value of one's stake in an investment company is __________ | Net Asset Value |
| Net asset Value is defined as _______ | market value of assets minus liabilities divided by shares outstanding |
| The Vanguard 500 Index Fund tracks the performance of the S&P 500. To do so, the fund buys shares in each S&P 500 company __________ | in proportion to the market value weight of the firm's equity in the S&P 500 |
| Investors who want to liquidate their holdings in a closed-end fund may sell their shares __________ | on the open market |
| __________ fund is defined as one in which the fund charges a sales commission to either buy into or exit from the fund. | A load |
| __________ funds stand ready to redeem or issue shares at their net asset value. | Open-end |
| __________ are often called mutual funds. | Open-end investment companies |
| Under SEC rules, the managers of certain funds are allowed to deduct charges for advertising, brokerage commissions, and other sales expenses directly from the fund assets rather than billing investors. These fees are known as __________ | 12b-1 Charges |
| SEC Rule 12b-1 allows managers of certain funds to deduct __________expenses from fund assets; however, these expenses may not exceed __________of the fund's average net assets per year. | Marketing, 1% |
| __________is an example of an exchange-traded fund. | SPDR or Spider |
| Advantages of ETFs over mutual funds include all but which one of the following? | ETF values can diverge from NAV. |
| Which type of fund generally has the lowest average expense ratio? | indexed funds |
| __________ is (are) real assets. | Trademark |
| Asset allocation refers to __________ | the allocation of the investment portfolio across broad asset classes |
| Security selection refers to the __________ | choice of specific securities within each asset class |
| Debt securities promise: 1 A fixed stream of income. 2 A stream of income that is determined according to a specific formula. 3 A share in the profits of the issuing entity. | A fixed stream of income and a share in the profits of the issuing entity |
| Money market securities are characterized by: 1 Maturity less than 1 year 2 Safety of the principal investment 3 Low rates of return | All of the above |
| After considering current market conditions, an investor decides to place 60% of her funds in equities and the rest in bonds. This is an example of __________ | Asset Allocation |
| Stone Harbor Products takes out a bank loan. It receives $100,000 and signs a promissory note to pay back the loan over 5 years. In this transaction, __________ | A new financial asset was created |
| Real assets are __________ | Assets used to produce goods and services |
| A major cause of the mortgage market meltdown in 2007 and 2008 was linked to __________ | Securlization |
| The systemic risk that led to the financial crisis of 2008 was increased by __________ | All the above |
| Which of the following is not a money market instrument? | preferred stock |
| Which one of the following is a true statement? | Common dividends cannot be paid if preferred dividends are in arrears on cumulative preferred stock. |
| Which of the following is not a true statement regarding municipal bonds? | A municipal bond is a debt obligation issued by the federal government. |
| Currently, the Dow Jones Industrial Average is computed by __________ | adding the prices of 30 large "blue-chip" stocks and dividing by a divisor adjusted for stock splits and large stock dividends |
| The Standard & Poor's 500 is __________ weighted index. | a value |
| In a _________ index, changes in the value of the stock with the greatest market value will move the index value the most, everything else equal. | Bond price index |
Created by:
SWiedeman