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FIN 375 Exam 1 Review Flashcards | StudBud
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FIN 375 Exam 1 Review
FIN 375 Exam 1 Review
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1
The most marketable money market security is _____.
bankers' acceptances
common stock
Treasury bills
certificates of deposit
2
Higher portfolio turnover:
Results in greater tax liability for investors
Results in greater trading costs, that investors have to pay for
Is a characteristic of asset allocation funds
All answers are correct
3
A typical bond price quote includes all but which one of the following?
yield to maturity
dividend yield
coupon
closing bond price
4
Level 3 NASDAQ subscribers _____.
can post bid and ask prices
have the fastest execution of trades
all of these options
are registered market makers
5
In 2017 mortgages represented approximately __________ of total liabilities and net worth of American households.
10%
28%
14%
42%
6
The material wealth of society is determined by and a function of the economy's________; ________
investment bankers; financial assets
investment bankers; real assets
productive capacity; real assets
productive capacity; financial assets
7
You short-sell 200 shares of Tuckerton Trading Co., now selling for $50 per share. What is your maximum possible loss?
$50
unlimited
$10,000
$150
8
Ownership of a call option entitles the owner to the __________ to __________ a specific stock
obligation; sell
right; sell
obligation; buy
right; buy
9
T-bills are issued with initial maturities of:
4 weeks, 16 weeks & 26 weeks
16 weeks & 26 weeks
4 weeks & 26 weeks
4 weeks & 16 weeks
10
More than ______ of all trading is believed to be initiated by computer algorithms.
75%
50%
40%
75%
11
The market share held by the NYSE Arca system in February 2011 was approximately ____.
45%
10%
25%
65%
12
Real assets in the economy include all but which one of the following?
common stock
buildings
land
consumer durables
13
Which one of the following provides the best example of securitization?
preferred stock
call option
mortgage pass-through security
convertible bond
14
Money markets are characterized by: I. Maturity < than 1 yearII. Safety of the principal III. Low rates of return
I, II, and III
I and III only
I and II only
I only
15
Several large banks manipulated the reported rates on which key money market rate?
brokers’ calls rate
federal funds rate
LIBOR
SIFMA
16
You sold short 300 shares of common stock at $30 per share. The initial margin is 50%. You must put up _________.
$6,000
$4,500
$10,000
$9,000
17
If an investor uses the full margin available, the equity in a margin account used for a stock purchase would be:
market value of the stock - amount owed on the margin loan
market value of the stock ÷ margin loan
market value of the stock + amount owed on the margin loan
margin loan × market value of the stock
18
Financial assets represent _____ of total assets of U.S. households.
under 70%
over 90%
about 30%
under 10%
19
A __ gives its holder the right to buy an asset for a specified exercise price on or before a specified expiration date.
futures contract
put option
call option
interest rate swap
20
A contingent deferred sales load is commonly called a ____.
front-end load
12b-1 charge
top-end sales commission
back-end load
21
Which of the following is
not
a characteristic of common stock ownership?
unlimited liability
right to any dividend paid by the corporation.
voting rights
residual claimant
22
Initial margin requirements on stocks are set by _________.
the New York Stock Exchange
the Federal Deposit Insurance Corporation
the Federal Reserve
the Securities and Exchange Commission
23
An example of a derivative security is _________.
a common share of General Motors
a Ford bond
a call option on Intel stock
a U.S. Treasury bond
24
A level _____ subscriber to the NASDAQ system may enter bid and ask prices.
2
1
4
3
25
Which of the following is
not
a financial intermediary?
an insurance company
a credit union
a real estate brokerage firm
a mutual fund
26
The yield on tax-exempt bonds is ______.
less than the yield on taxable bonds
usually less than 50% of the yield on taxable bonds
normally about 90% of the yield on taxable bonds
greater than the yield on taxable bonds
27
__________ represents an ownership share in a corporation.
Preferred stock
A call option
A fixed-income security
Common stock
28
Which of the following mortgage scenarios will benefit the homeowner the most?
None of these options, as the banker's interest will always be protected.
adjustable rate mortgage when interest rate increases.
fixed rate mortgage when interest rate rises.
fixed rate mortgage when interest rates falls.
29
An intermediary that pools and manages funds for many investors is called?
a commercial bank
a credit union
an investment company
an investment banker
30
An example of a real asset is:
Customer goodwill
A patent
All answers are examples of a real asset
A college education
31
Which type of fund is often priced at a significant discount to net asset value?
open-end fund
hedge fund
ETF
closed-end fund
