Investments ch 3 Quiz

Stockholders could get which as a return from investing in common stock

Bonds can be purchased at a discount from their face value

Margin minimizes gains and losses

Money Market funds offered by mutual fund companies are

Small cap stocks are riskier than Large cap stocks

Which of these gives me the right to buy a stock

Margin is

Normally, investing in stock means I go long in it by buying it so it will go up or pay dividends

Margin has

Which of these are true about bonds and markets

Options trades involve

A put gives me the right but not the obligation to sell an asset

We have a whole chapter on bonds so I shouldn't be worried

When we say fixed income, we mean notes or bonds

Which of these are true about bonds

When I buy a company's common stock, I in essence own a tiny part, sharing in gains, but it could also become worthless

Which of these are risky assets that the common investor doesn't do on a normal everyday basis

Selling short is the opposite, and is something I would do speculatively if I think the stock would decline a lot soon

This is the risk-free rate we peg to due to being backed by the taxing ability of the U.S. gov't

When I buy a company's common stock, I have lent money to the company and get paid back the face amount at maturity

A preferred stockholder would be ahead in line of common stockholders if a company did go into liquidation

Which of these could be users of derivatives

The purchaser or seller of a futures contract is obligated to buy or sell

When corporations issue bonds, bondholders in essence have lent money to the corporation

Which of these gets their money first in event of a corporate insolvency