Review Test Submission: Knowledge Check - Week 1 Part B

User HA MY HOANG
Course (2022-23 BFM120) Investment Management
Test Knowledge Check - Week 1 Part B
Started 12/12/22 11:13
Submitted 12/12/22 11:24
Status Completed
Attempt Score 130 out of 200 points  
Time Elapsed 11 minutes
Results Displayed All Answers, Submitted Answers, Correct Answers
 Question 1
0 out of 10 points

The means by which individuals hold their claims on real assets in a well-developed economy are 
Selected Answer:  
depository assets
Answers: investment assets
depository assets
derivative assets
 
financial assets
exchange-driven assets
 Question 2
10 out of 10 points

Financial assets 
Selected Answer:  
indirectly contribute to the country's productive capacity
Answers: directly contribute to the country's productive capacity
 
indirectly contribute to the country's productive capacity
contribute to the country's productive capacity both directly and indirectly
do not contribute to the country's productive capacity either directly or indirectly
are of no value to anyone
 Question 3
10 out of 10 points

A fixed-income security pays

Selected  
Answer: a fixed stream of income or a stream of income that is determined according to a specified
formula for the life of the security
Answers: a fixed level of income for the life of the owner
 
a fixed stream of income or a stream of income that is determined according to a specified
formula for the life of the security
a variable level of income for owners on a fixed income
a fixed or variable income stream at the option of the owner
 Question 4
10 out of 10 points
Money market securities
Selected Answer:  
All of the options
Answers: are short term
are highly marketable
are generally very low risk
are highly marketable and are generally very low risk
 
All of the options
 Question 5
10 out of 10 points

Corporate shareholders are best protected from incompetent management decisions by 
Selected Answer:  
the threat of takeover by other firms
Answers: the ability to engage in proxy fights
management's control of pecuniary rewards
the ability to call shareholder meetings
 
the threat of takeover by other firms
one-share/one-vote election rules
 Question 6
10 out of 10 points

The smallest component of the money market is 

Selected Answer:  
small-denomination time deposits
Answers: repurchase agreements
 
small-denomination time deposits
savings deposits
money market mutual funds
commercial paper
 Question 7
10 out of 10 points

Commercial paper is a short-term security issued by ________ to raise funds

Selected Answer:  
large, well-known companies
Answers: the Federal Reserve Bank
commercial banks
 
large, well-known companies
the New York Stock Exchange
state and local governments
 Question 8
10 out of 10 points

Which of the following statements is true regarding a corporate bond? 

Selected  
Answer: A corporate convertible bond gives the holder the right to exchange the bond for a specified
 number of the company's common shares
Answers: A corporate callable bond gives the holder the right to exchange it for a specified number of
the company's common shares
A corporate debenture is a secured bond
A corporate indenture is a secured bond
 
A corporate convertible bond gives the holder the right to exchange the bond for a specified
number of the company's common shares
Holders of corporate bonds have voting rights in the company
 Question 9
0 out of 10 points

Which of the following is true of the Dow Jones Industrial Average? 

Selected  
Answer: It is a value-weighted average of 30 large industrial stocks and the divisor must be adjusted
for stock splits
Answers: It is a value-weighted average of 30 large industrial stocks
It is a price-weighted average of 30 large industrial stocks
The divisor must be adjusted for stock splits
It is a value-weighted average of 30 large industrial stocks and the divisor must be adjusted
for stock splits
 
It is a price-weighted average of 30 large industrial stocks and the divisor must be adjusted
for stock splits
 Question 10
0 out of 10 points

The index that includes the largest number of actively traded stocks is

Selected Answer:  
the NASDAQ Composite Index
Answers: the NASDAQ Composite Index
the NYSE Composite Index
 
the Wilshire 5000 Index
the Value Line Composite Index
the Russell Index
 Question 11
10 out of 10 points

Which of the following statements regarding the specialist are true? 

Selected  
Answer: Specialists maintain a book listing outstanding unexecuted limit orders, earn income from
commissions and spreads in stock prices, and stand ready to trade at quoted bid and ask prices
Answers: Specialists maintain a book listing outstanding unexecuted limit orders
Specialists earn income from commissions and spreads in stock prices
Specialists stand ready to trade at quoted bid and ask prices
Specialists cannot trade in their own accounts
 
Specialists maintain a book listing outstanding unexecuted limit orders, earn income from
commissions and spreads in stock prices, and stand ready to trade at quoted bid and ask prices
 Question 12
10 out of 10 points

Investment bankers 
Selected  
Answer: act as intermediaries between issuers of stocks and investors and act as advisors to companies in
helping them analyze their financial needs and find buyers for newly issued securities
Answers: act as intermediaries between issuers of stocks and investors
act as advisors to companies in helping them analyze their financial needs and find buyers for
newly issued securities
accept deposits from savers and lend them out to companies
 
act as intermediaries between issuers of stocks and investors and act as advisors to companies in
helping them analyze their financial needs and find buyers for newly issued securities
 Question 13
0 out of 10 points

Restrictions on trading involving insider information apply to the following except 

Selected Answer:  
major stockholders
Answers: corporate officers
corporate directors
major stockholders
 
All of the options are subject to insider trading restrictions
None of the options is subject to insider trading restrictions
 Question 14
10 out of 10 points

The cost of buying and selling a stock consists of 

Selected  
Answer: broker's commissions, dealer's bid-asked spread, and a price concession an investor may be
forced to make
Answers: broker's commissions
dealer's bid-asked spread
a price concession an investor may be forced to make
broker's commissions and dealer's bid-asked spread
 
broker's commissions, dealer's bid-asked spread, and a price concession an investor may be
forced to make
 Question 15
10 out of 10 points

The finalized registration statement for new securities approved by the SEC is called
Selected Answer:  
the prospectus
Answers: a red herring
the preliminary statement
 
the prospectus
a best-efforts agreement
a firm commitment
 Question 16
0 out of 10 points

Which one of the following statements regarding open-end mutual funds is false? 
Selected Answer:  
The funds redeem shares at net asset value
Answers: The funds redeem shares at net asset value
The funds offer investors professional management
 
The funds offer investors a guaranteed rate of return
The funds offer investors professional management and a guaranteed rate of return
The funds redeem shares at net asset value and offer investors professional management
 Question 17
10 out of 10 points

Which of the following functions do investment companies perform for their investors? 
Selected Answer:  
All of the options
Answers: Record keeping and administration
Diversification and divisibility
Professional management
Lower transaction costs
 
All of the options
 Question 18
0 out of 10 points

Pools of money invested in a portfolio that is fixed for the life of the fund are called 
 

Selected Answer:  
closed-end funds
Answers: closed-end funds
open-end funds
 
unit investment trusts
REITS
redeemable trust certificates
 Question 19
10 out of 10 points

Most actively managed mutual funds, when compared to a market index such as the Wilshire 5000
Selected Answer:  
do not outperform the market
Answers: beat the market return in all years
beat the market return in most years
exceed the return on index funds
 
do not outperform the market
 Question 20
 0 out of 10 points

Investors in closed-end funds who wish to liquidate their positions must 

Selected Answer:  
sell their shares to the issuer at a discount to net asset value
Answers:  
sell their shares through a broker
sell their shares to the issuer at a discount to net asset value
sell their shares to the issuer at a premium to net asset value
sell their shares to the issuer for net asset value
hold their shares to maturity