Grading SummaryThese are the automatically computed results of your exam. Grades for essay questions, and comments from your instructor, are in the "Details" section below. Date Taken: Time Spent: Points Received:
Question Type: # Of Questions: True/False 11 Multiple Choice 19

Grade Details - All QuestionsQuestion 1. Question : The documents signed when a customer opens a brokerage account
Student Answer: serve as an informal relationship between the customer and the stockbroker.
limit the customer to dealing only through that brokerage firm.
may be signed by a minor child provided that the money being invested belongs to the child. establish a legal relationship between the customer and the brokerage firm.





Question 2. Question : Which one of the following is considered a financial rather than a general newspaper?
Student Answer: The New York Times
USA Today
The Wall Street Journal
The Washingtom Post





Question 3. Question : Most brokerage firms will invest surplus cash, dividends and interest received, proceeds from the sale of stock and the like in
Student Answer: additional securities of the same type.
certificates of deposit.
a non-interest bearing account.
a money market mutual fund.





Question 4. Question : Assume that the S&P 500 composite stock index is 995.50. This means that
Student Answer: the average stock in the index is selling for $99.55.
an investor would have to pay $995.50 to purchase one share of each of the stocks represented in the index. the market values of the stocks in the index increased by a factor of 99.55 since the 1941-1943 base period. the share prices of the stocks in the index have risen 995.50 times since 1941.




Question 5. Question : Mike bought 200 shares of EG stock two years ago at $16 per share. The stock has traded in a range of $21 to $44 a share over the past year. EG is now selling for $43.60 a share. EG announces its earnings today and Mike feels the stock could go to $60 on good news or fall to $30 on bad. To protect his profits, the most appropriate order for him to place is
Student Answer: market order to sell immediately.
a limit sell order at $60.00.
a stop loss order at $42.
a stop-limit order to sell at $45.





Question 6. Question : Earnings on securities held in street name by the brokerage are not reported to the Internal Revenue Service.
Student Answer: True False




Question 7. Question : The published analysis and recommendations of an individual brokerage firm is called a
Student Answer: prospectus.
comparative data source.
back-office research report.
broker's subscription report.





Question 8. Question : Commission structures vary with the type of security being traded, the type of broker involved and the size of the order.
Student Answer: True False




Question 9. Question : An individual can sort stocks by dividend rates, growth rates, and price/earnings ratios using screening tools on the Internet.
Student Answer: True False




Question 10. Question : Trading stocks is much faster and less complicated if an individual investor has possession of the actual stock certificates.
Student Answer: True False




Question 11. Question : Which one of the following statements about limit orders is correct?
Student Answer: The execution of the trade will occur prior to the close of trading on the day the trade is placed. The execution will occur at the regular open on the day following the day the trade is placed. The trade may be executed only at the limit price or better at any time prior to expiration or cancellation of the order. The trade will be executed at the market price at the end of the third business day, if not executed previously at the limit price.




Question 12. Question : Which of the following statements about the Dow Jones Industrial Average are correct?
Student Answer: I and III only
II and IV only
I, III and IV only
I, II, III and IV





Question 13. Question : Over-the-counter market activity is reflected in the
Student Answer: Standard & Poor's composite index.
Nasdaq index.
AMEX composite index.
financials index.





Question 14. Question : Traders who hold stocks for less than a full day can reduce the tax burden on their profits.
Student Answer: True False




Question 15. Question : Individuals can use the Internet to
Student Answer: I and IV only
II and III only
I, III and IV only
I, II, III and IV





Question 16. Question : Which of the following designations does not have formal education and testing requirements.
Student Answer: Chartered Financial Analyst
Certified Financial Planner
Registered Investment Adviser
Certified Public Accountant





Question 17. Question : Which one of the following is the LEAST important when selecting a stockbroker?
Student Answer: knowing the stockbroker personally
selecting a stockbroker who best understands your investment goals
considering the services offered and the related costs
getting referrals from personal acquaintances with similar investment objectives




Question 18. Question : An individual investor who wishes to borrow money to buy stocks must open a
Student Answer: signature account.
margin account.
joint account.
custodial account.





Question 19. Question : Investors are protected from market losses by the SIPC insurance offered by some full-service brokers.
Student Answer: True False




Question 20. Question : The Internet provides
Student Answer: II and III only
III and IV only
I, II and III only
I, II, III and IV





Question 21. Question : Which one of the following is a measure of the performance of small companies?
Student Answer: Russell 2000
Russell 1000
Russell 3000
Value Line 1700





Question 22. Question : A "pump and dump" scheme involves buying shares of stock, hyping that stock via the Internet and then quickly selling the shares at a profit.
Student Answer: True False




Question 23. Question : Many brokerage firms require that disputes between individual investors and brokers be settled through arbitration.
Student Answer: True False




Question 24. Question : The Dow Jones Industrial Average (DJIA) consists of 30 stocks whose price behavior
Student Answer: typically has little correlation with the rest of the stock market.
broadly reflects the overall price behavior of the stock market.
reflects the changes in value of manufacturing stocks only.
leads the movements in the general economy by one to two weeks.





Question 25. Question : Which of the following sites is especially valuable for information concerning international investments?
Student Answer: http://yahoo.finance.com
www.adr.com
www.moody's.com
www.bondsonline.com





Question 26. Question : A stop-loss order is activated once the stock reaches the specified price.
Student Answer: True False




Question 27. Question : Which one of the following web sites should you utilize to review the financial information in a company's 10-K report?
Student Answer: freeedgar.com
valueline.com
wsj.com
finance.yahoo.com





Question 28. Question : It is generally a good idea to use limit orders when purchasing IPOs on-line.
Student Answer: True False




Question 29. Question : Investment advisors are legally responsible for losses incurred by their clients.
Student Answer: True False




Question 30. Question : McDonald's stock is now selling for $57 per share. Kim wants to buy 100 shares but only if she can do so at $55 or less. She should place a(n)
Student Answer: stop order.
market order.
limit order.
odd-lot order.