WALL STREET

A short-term unsecured promissory
note is called:

T-Bill

*Commercial Paper

Letter of Credit

Repurchase Agreement

Which of the following carries the 
maximum rate that banks are allowed
pay to their depositors?

Savings Account

Money Markets

*Certificates of Deposits

Checking Accounts

Which of these carries the highest risk
of capital loss due to higher 
interest rates?

10-year notes

20-year bonds

*30-year bonds

Treasury bills

When compared to stocks,
bonds are considered to have:

Higher risk

Equal risk

*Lower risk

No risk

A fund used for gradual repayment of 
debt is called a:

Fund raiser

*Sinking fund

Mutual fund

Debt depletion fund

A call feature on a bond allows
the issuer of the bond to:

Call you about new yields and prices

*Pay off the bond early

Call on you for more money

Negotiate a higher interest rate

Zero coupon bonds:

Pay no interest

Have no phantom income

*Are stripped of their coupons 

Start at 100 percent of par value and
pay interest and principal until
zero remains

The price at which a buyer is willing
to purchase a bond is called:

*Bid

Ask

Execution price

Yield

The price at which a seller is willing
to sell a bond is called the:

Bid

*Ask

Execution price

Yield

The net annual percentage of income
from an investment is called the:

*Yield

Rate

Premium

Price

A preliminary report about a company
before it is offered to the public
for investment, is called:

An income statement

An annual report

*A red herring

An underwriting

A report about a company that is being
offered to the public for investment 
is called:

*A prospectus

An annual report

A red herring

An underwriting

Which of the following is backed by the
full faith and credit of the
United States Government?

Blue chip stocks

Corporate bonds

*Ginnie Maes (GNMAs)

Municipal bonds

Government bonds are the safest 
investment.  Which of the following 
is the second safest?

Mutual funds

*Municipal bonds

Utilities stocks

AT&T bonds

Which one of the following bond types 
is not a Municipal bond?

Pollution control bond

Revenue bond

General obligation bond

*Fannie Mae (FNMA) bond

A senior equity security with
a fixed dividend is called a:

Blue chip stock

Growth stock

*Preferred stock

Utility stock

The term used to describe the
amount of borrowed funds in use is:

Liquidity

*Leverage

Mortgage

Equity

"Hard dollars" refers to:

*After-tax dollars

Gross income

Operating income

Net income before taxes

An income-producing option on a stock
is called a:

Long call

Long put

*Covered call

Naked put

Writing "naked puts" is considered a:

Safe investment

Moderately risky investment

Risky investment

*Highly risky investment

The purchase of a contract to buy a 
stock at a specified price in 
the future is called a:

*Long call

Short call

Long put

Short put

The purchase of a contract to sell 
a stock at a specified price in 
the future is called a:

Long call

Short call

*Long put

Short put

The price at which a stock can be 
purchased or sold through an option 
agreement is the:

Strict price

*Exercise price

Bid

Ask

To sell a stock short means:

To sell less shares then you own 

Not believing in the value of the stock

*To sell shares that you do not own

To buy stocks in a margin account

The biggest advantage of mutual funds
for the small investor is:

Liquidity

*Diversification

Management

Safety

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