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Busn 201 - Chap 19
Understanding Securities and Investments
| Question | Answer |
|---|---|
| Independent dealers who own the securities that they buy and sell are traded: | Over the counter market. |
| A ________ is a bond for which no specific property is pledged as collateral. | Debenture. |
| ________ are stocks and bonds representing secured, or asset-based, claims by investors against issuers. | Securities. |
| Agreements to purchase specified amounts of commodities at a given price on a set future date are known as: | Future contracts. |
| What types of investments would be most likely for a mutual fund with a safety strategy? | Treasury Bills. |
| Which term identifies a period of upward moving stock prices? | Bull market. |
| Before a corporation sells securities, that corporation is required by law to offer future investors the opportunity to read through a document, which contains complete information on both the new issue and the corporation called? | Prospectus. |
| Which of the following statements about short selling is false? | short selling involves selling a security that you do not own by borrowing it from your broker. |
| A(n) ________ is an order to a stock broker to sell a security if its price falls to or below a specified amount. | Stop order. |
| The illegal practice of using special knowledge about a firm that is not available to the general public for making profits in the stock market is | Insider trading. |
| What are securities? | Stocks and bonds that can be bought and sold. |
| Secondary securities? | The sale and purchase of previously issued stocks and bonds. |
| What is par value? | The arbitrary value of stock set by the issuing companies board of directories and stated on stock certificates. |
| What is market value? | The current price of one share of a stock in the secondary securities market. |
| What is book value? | Value of a common stock expressed as total stockholders equity/ number of shares of stock. |