Savings bonds are primary markets because

the original buyer cannot sell them to someone else

What is usually the relationship between a bond's rating and the interest rate the company pays

higher the rating, lower the rate

Your friend Jorge was given $1000 to invest, what should he do?

contact a brokerage firm and talk to a stockbroker

Why would investors buy a junk bond?

junk bonds pay a potentially higher level of interest

What does the Dow Jones Industrial Average measure?

average selling price of selected top stocks on the NYSE

Leslie gets $2,000, has a bill to pay in Aug, decides to put it in a savings account why?

liquidity, she needs the money soon

What does a mutual fund do?

invests many peoples savings in a bunch of stuff

a friend wants you to invest $1000 in her company, how do you offset your risk?

ask for a high interest rate in exchange for the loan

What does the NYSE do?

arranges stock and bond trading for many large companies

Which is one likely trade-off for investing in something with a high rate of return

investment will have low liquidity

What is the difference between a bear and bull market

bear trends downwards, bull trends upwards

How does the risk of a money market mutual fund compare with that of a savings account?

slightly greater risk than a savings account

studbud

Chapter 11 Economics

25 termsStudBud Administration653 plays

Flashcards25 cardsFPractice quizPHost liveL

Questions 25

Answers

1
Savings bonds are primary markets because
they are held for many years before reaching maturity
they are traded for short-term gains like money markets
they can be resold for liquidity if an owner needs cash
the original buyer cannot sell them to someone else
2
How can borrowing money from banks help businesses grow?
They buy mutual funds
They invest the money
They borrow more savings
They make higher profits
3
What is usually the relationship between a bond's rating and the interest rate the company pays
higher the rating, lower the rate
higher the rating, higher the rate
there is no relationship
rating is the same as the rate
4
Your friend Jorge was given $1000 to invest, what should he do?
call the NYSE, they will direct them to the OTC market
contact a brokerage firm and talk to a stockbroker
contact NASDAQ, they will assign him a stockbroker
reserve a seat at the New York Stock Exchange
5
Why would investors buy a junk bond?
they want a steady source of income with low risk
junk bonds are rated higher than municipal bonds
junk bonds pay a potentially higher level of interest
they want to invest in a particular company
6
Of the bonds listed, which is the most risky?
junk bonds
municipal bonds
savings bonds
treasury bonds
7
Why might you choose an investment with high risk instead of one with low risk?
for greater liquidity
for a higher return
for a lower return
to avoid losin gmoney
8
What does the Dow Jones Industrial Average measure?
average prices of all US stocks and bonds
prices of all stocks and bonds in the NYSE
prices of all stocks sold on the NASDAQ
average selling price of selected top stocks on the NYSE
9
Price is too high for a stock, what should the board suggest?
offer higher dividends
reduce the # of shares on the market (reverse stock split)
offer more preferred stocks
initiate a stock split
10
the most well known, financially sound companies on the NYSE are called
S&P 500 stocks
blue chip stocks
golden stocks
DOW 30 stocks
11
you have a client who doesn't want 2lose their $ if a company goes out of business, the should
buy income stock
buy preferred stock
buy growth stock
buy common stock
12
Leslie gets $2,000, has a bill to pay in Aug, decides to put it in a savings account why?
she wants to receive as much interest as possible
liquidity, she needs the money soon
she wants to take a risk so that she can get a high return
she wants to make a safe long term investment
13
you are a financial adviser whose client wants stock that pays regular dividends, they should
buy common stock
buy income stock
buy growth stock
buy preferred stock
14
if a bond from a company has a coupon rate of 5%, a par value of $2000 and matures in 5 years..
It will have earned $200
it will have earned $500
it will have earned $2000
it will have earned $100
15
What happened to stock prices during the Great Crash of 1929?
prices stayed the same
prices rose
prices fell
16
What does a mutual fund do?
makes loans to banks
invests your savings in stocks
invests many peoples savings in a bunch of stuff
borrows money to lend to its members
17
What happens to a company's stock price when the company makes a profit?
stock price goes up
stock price goes in the same direction as the overall market
stock price stays the same
stock price goes down
18
a friend wants you to invest $1000 in her company, how do you offset your risk?
invest your $500 in a CD
ask for a high interest rate in exchange for the loan
Lend your neighbor the $500 and cross your fingers
Use the $500 to open a savings account
19
What does the NYSE do?
handles stock and bond trading on the internet only
arranges buying and selling of blue chip stocks only
buys and sells stocks for wealthy private investors
arranges stock and bond trading for many large companies
20
you have $100 to invest and will not need easy access for 6 months.What should you do?
buy a junk bond
get a short term CD
put in savings account
get a municipal bond
21
Which is one likely trade-off for investing in something with a high rate of return
investment will not mature
investment will have no assets
investment will have low liquidity
investment will have low risk
22
To finance the building of a new police station, a local government is most likely to issue a
junk bond
money market bond
municipal bond
treasury bond
23
What is the difference between a bear and bull market
always invest in bull markets, never in bear markets
bear markets also called primary markets, bull are secondary
bear trends upwards, bull trends downwards
bear trends downwards, bull trends upwards
24
Which of the following is true of CCC bonds?
they are high-risk investments
they mature quickly
they have high interest rates
they have low interest rates
25
How does the risk of a money market mutual fund compare with that of a savings account?
less risk than a savings account
the risk is about the same
much greater risk than a savings account
slightly greater risk than a savings account

Chapter 11 Economics Flashcards | StudBud

Chapter 11 Economics

25 termsStudBud Administration653 plays

Chapter 11 Economics

Flashcards25 cardsFPractice quizPHost liveL

Questions 25

Answers

1
Savings bonds are primary markets because
they are held for many years before reaching maturity
they are traded for short-term gains like money markets
they can be resold for liquidity if an owner needs cash
the original buyer cannot sell them to someone else
2
How can borrowing money from banks help businesses grow?
They buy mutual funds
They invest the money
They borrow more savings
They make higher profits
3
What is usually the relationship between a bond's rating and the interest rate the company pays
higher the rating, lower the rate
higher the rating, higher the rate
there is no relationship
rating is the same as the rate
4
Your friend Jorge was given $1000 to invest, what should he do?
call the NYSE, they will direct them to the OTC market
contact a brokerage firm and talk to a stockbroker
contact NASDAQ, they will assign him a stockbroker
reserve a seat at the New York Stock Exchange
5
Why would investors buy a junk bond?
they want a steady source of income with low risk
junk bonds are rated higher than municipal bonds
junk bonds pay a potentially higher level of interest
they want to invest in a particular company
6
Of the bonds listed, which is the most risky?
junk bonds
municipal bonds
savings bonds
treasury bonds
7
Why might you choose an investment with high risk instead of one with low risk?
for greater liquidity
for a higher return
for a lower return
to avoid losin gmoney
8
What does the Dow Jones Industrial Average measure?
average prices of all US stocks and bonds
prices of all stocks and bonds in the NYSE
prices of all stocks sold on the NASDAQ
average selling price of selected top stocks on the NYSE
9
Price is too high for a stock, what should the board suggest?
offer higher dividends
reduce the # of shares on the market (reverse stock split)
offer more preferred stocks
initiate a stock split
10
the most well known, financially sound companies on the NYSE are called
S&P 500 stocks
blue chip stocks
golden stocks
DOW 30 stocks
11
you have a client who doesn't want 2lose their $ if a company goes out of business, the should
buy income stock
buy preferred stock
buy growth stock
buy common stock
12
Leslie gets $2,000, has a bill to pay in Aug, decides to put it in a savings account why?
she wants to receive as much interest as possible
liquidity, she needs the money soon
she wants to take a risk so that she can get a high return
she wants to make a safe long term investment
13
you are a financial adviser whose client wants stock that pays regular dividends, they should
buy common stock
buy income stock
buy growth stock
buy preferred stock
14
if a bond from a company has a coupon rate of 5%, a par value of $2000 and matures in 5 years..
It will have earned $200
it will have earned $500
it will have earned $2000
it will have earned $100
15
What happened to stock prices during the Great Crash of 1929?
prices stayed the same
prices rose
prices fell
16
What does a mutual fund do?
makes loans to banks
invests your savings in stocks
invests many peoples savings in a bunch of stuff
borrows money to lend to its members
17
What happens to a company's stock price when the company makes a profit?
stock price goes up
stock price goes in the same direction as the overall market
stock price stays the same
stock price goes down
18
a friend wants you to invest $1000 in her company, how do you offset your risk?
invest your $500 in a CD
ask for a high interest rate in exchange for the loan
Lend your neighbor the $500 and cross your fingers
Use the $500 to open a savings account
19
What does the NYSE do?
handles stock and bond trading on the internet only
arranges buying and selling of blue chip stocks only
buys and sells stocks for wealthy private investors
arranges stock and bond trading for many large companies
20
you have $100 to invest and will not need easy access for 6 months.What should you do?
buy a junk bond
get a short term CD
put in savings account
get a municipal bond
21
Which is one likely trade-off for investing in something with a high rate of return
investment will not mature
investment will have no assets
investment will have low liquidity
investment will have low risk
22
To finance the building of a new police station, a local government is most likely to issue a
junk bond
money market bond
municipal bond
treasury bond
23
What is the difference between a bear and bull market
always invest in bull markets, never in bear markets
bear markets also called primary markets, bull are secondary
bear trends upwards, bull trends downwards
bear trends downwards, bull trends upwards
24
Which of the following is true of CCC bonds?
they are high-risk investments
they mature quickly
they have high interest rates
they have low interest rates
25
How does the risk of a money market mutual fund compare with that of a savings account?
less risk than a savings account
the risk is about the same
much greater risk than a savings account
slightly greater risk than a savings account