Question 1

Explain the differences between preferred stock and common stock.

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Question 2

Bonds represent a major source of long-term financing.What is a bond? Explain the major elements that must be in a bond issue.

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Question 3

Explain the major advantages and disadvantages of issuing stock as a source of long-term financing.

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Question 4

The Securities and Exchange Commission developed ________ to halt trading in the stock market for a short time when the market has experienced a dramatic decrease in prices.

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Question 5

Discuss the role of investment bankers in the securities markets.

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Question 6

Daily reporting of the Dow Jones Industrial Average serves to:

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Question 7

In reviewing the firms whose stocks comprise the Dow Jones Industrial Average,we discover:

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Question 8

To reduce market volatility,________ require that a key computer is turned off so that program trading must be done 'by hand' rather than automatically by computer.

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Question 9

The Dow Jones Industrial Average represents the average price of ________ industrial stocks.

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Question 10

________ involve(s)computer instructions that automatically sell stocks whose value has dropped by a predetermined amount.

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Question 11

Describe four different types of common stock that an investor may consider,depending upon the investor's strategy and risk tolerance.

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Question 12

The risk/return trade-off is inherent in any investment strategy.What are the five key criteria investors should consider when selecting investment options?

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Question 13

Six years ago,Angie invested $50,000 that she inherited from her grandfather into a growth stock mutual fund.Each share of the fund cost $22/share.Yesterday,she perused a mutual fund quote on the Internet.The quotation showed 1)Year To Date Return;2)Yield;3)Net Asset Value;4)Previous Close.Which of these will provide her with an indication of the present price per share she can expect to realize if she calls her broker tomorrow morning and asks her to sell the shares?

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Question 14

The purpose of the SEC's circuit breakers rule is to:

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Question 15

The traditional market barometer used to measure the direction of the stock market is the:

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Question 16

During Ben's lunch break,he logged on to his computer to find the mutual fund he wanted to buy.As he made his way around several websites,he realized that the NAV (net asset value)quoted was yesterday's close.His shares would be purchased tomorrow,with today's closing price.Looking over his shoulder,one of his coworkers suggested that he look into _________ because they are similar to mutual funds,but could be traded during the entire trading day,just like stocks.

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Question 17

Gerald,a recent graduate of a community college,is about to make his first investment in the stock market.Which of the following would be a cautious way for Gerald to start investing?

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Question 18

Reviewing the stock market performance between 2000 and 2002 reveals a:

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Question 19

Applying what you have learned about investments introduced to you in Chapter 19,put the following investments in order from riskiest to least risky.Which of following lists begin with the least risky investment and ends with the most risky? Least risky = 1;most risky = 5

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Question 20

One criticism of the Dow Jones Industrial Average suggests that it:

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Quiz 19: Using Securities Markets for Financing and Investing Opportunities