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IDC4U UNIT ONE REVIEW Flashcards | StudBud
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IDC4U UNIT ONE REVIEW
IDC4U UNIT ONE REVIEW
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Capital Markets MC review
Flashcards
18 cards
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Practice quiz
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Questions
18
Answers
1
Which of the following would be considered a risk-free investment?
high-grade corporate bonds
government Treasury bills (T-bills)
equity in a house
gold
2
A firm that buys / sells securities inthe secondary market for investor is called a
investment bank
underwriter
broker
chartered bank
3
If Mitch entered a market order to buy Molson-Coors, he would
short the stock at the currentprice
purchase the stock at his stated price
purchase the stock at the price itclosed at yesterday
purchase the stock at the current price
4
What is an advantage of purchasing common stock?
stocks with high interest rates are good for retirees
offer high growth potential forinvestors
less riskthan purchasing bonds
common stock has first claim ondividends ahead of preferred
5
A start-up company would list on the__ exchange; an established Cdn. companywould list on the__
TSX Venture Exchange, Toronto StockExchange
TSX Venture Exchange, MontrealStock Exchange
Toronto StockExchange, Montreal Stock Exchange
Montreal Stock Exchange. TorontoStock Exchange
6
Investment portfolios are:
the mix of banks someone uses
the mixof securities someone holds
the mix of job experience on one'sresume
the mix of common share one owns
7
Which of the following statements about short selling is TRUE?
investors will profitfrom shorting when stock prices rise
investors mayprofit when stock prices are falling
short selling is a good strategy ina bull market
short selling is less risky thangoing long
8
Which of the following handles the buying and selling of new stock and bonds by business firms?
A.the secondary securities market
A.the commodities market
A.the primarysecurities market
A.the over-the-counter market
9
If you buy stocks of a company such as Bombardier, you are purchasing:
the companyreceives the proceeds of the sale
A.shares fromthe over-the-counter market
A.shares in the secondary market,directly from Bombardier
the secondary market, from another investor who is selling
10
A stock of a risky company that is just starting to make a profit could be termed
cyclical
growth
blue chip
speculative
11
Which of the following is not a characteristic of a blue chip stock?
have numerous assets to get themthrough tough economic times
earnings and dividends are wildlyvariable
Huge companies
usually leaders in their industry
12
A stock of a company that has faced very tough times, and almost went bankrupt is called:
speculative
turn around
cyclical
blue chip
13
If your ROI is 12% and inflationis 3.5%. What is the effect on the return on your investment?
Inflation decreasesyour return
No effect 12% ROI is very good
Increases your return 12+3.5 = 15.5real rate of return
Depends on the economic conditions
14
The capital market is…
the term given to the stockexchanges of the world
bringingtogether the users and the investors of capital
a farmersmarket in Ottawa
another termfor money
15
Which of the following is a benefit ofshare ownership
all ofthe above are benefits
marketability (freedom to sell yourshares)
capital appreciation(growth)
right to vote on material matersaffecting the company
16
Which term identifies a period of downward moving stock prices?
program trading market
bull market
bear market
super market
17
When you invest in bonds you are really:
buying preferred stock in a company
taking more risk than buying equity
buying ownershipin a company
loaning money to a company
18
Order to buy a stock only if its price is less than or equal to agiven amount
stop loss order
limit order
market order
short sale
