Devry FIN 351 Week 1 Quiz
(TCO 1) When ranking security returns from highest return to lowest return, the data shows that the annualized returns are as follows:
- Large stocks, small stocks, long-term corporate bonds, long-term government bonds, and treasury bills.
- Treasury bills, long-term government bonds, long-term corporate bonds, large stocks, small stocks
- Large stocks, small stocks, long-term government bonds, long-term corporate bonds, and treasury bills.
- Small stocks, large stocks, long-term corporate bonds, long-term government bonds, and treasury bills.
(TCO 1) A(n) _____ is a legally documented claim on an asset, while a(n) _____ is an actual, tangible asset which may be seen, felt, held, or collected.
- real asset; financial asset
- financial asset; real asset
- indirect equity claim; direct equity claim
- direct equity claim; indirect equity claim
(TCO 1) What factors must be considered in choosing between investment alternatives?
- Risk and liquidity
- Interest or dividends versus capital gains
- Timeframe for managing funds and evaluating performance and tax effects
- All of the above
(TCO 1) Which of the following is NOT a characteristic of an organized exchange?
- An organized exchange functions as a primary market.
- Securities are bought and sold in an auction market by brokers acting as agents for buyers and sellers in a central location.
- An organized exchange may be either national or regional.
- An organized exchange has a central location where all trading takes place.
(TCO 1) In the _____ market, existing assets are exchanged between investors, while in the _____ market, participants buy their assets directly from the source of the asset.
- primary; secondary
- secondary; primary
- tertiary; primary
- primary; OTC
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(TCO 1) Bringing private companies public for the first time is called _____.
- a private placement
- an initial public offering (IPO)
- a secondary offering
- a founder’s sale
(TCO 1) The exchange with the largest dollar volume in major companies, and which has the most restrictive listing requirements, is _____.
- the New York Stock Exchange
- the American Exchange
- the NASDAQ Stock Market
- the Securities Exchange
(TCO 1) The _____ is the tax rate that applies to each new dollar of income.
- average tax rate
- short-term capital gains tax rate
- long-term capital gains tax rate
- marginal tax rate
(TCO 1) The index which gives equal weight to every company included, and is therefore not dominated by any single company, is the _____.
- Dow Jones Composite Average
- Standard & Poor’s 400 Index
- Value Line Average
- American Stock Exchange Index
(TCO 1) When an investor establishes a position in a security, they are said to be _____.
- long if they purchase the security for their account
- long if they sell the security for their account
- short if they sell the security for their account
- Both A and C