1. An agreement that grants the owner the right, but not the obligation, to buy
ID: 2630405 • Letter: 1
Question
1. An agreement that grants the owner the right, but not the obligation, to buy or sell a specific asset at a specified price during a specified time period is called a(n) _____ contract. (Points : 1)
futures
obligatory
quoted
fixed
option
Question 2.
2. Which one of the following is the best definition of a money market instrument? (Points : 1)
Corporate debt that matures in 90 days or less
Bank savings account
Investment issued by a financial institution that matures in 30 days or less
Investment issued by a financial institution that matures in one year or less
Debt issued by the government or a corporation that matures in one year or less
Question 3.
3. Which of the following are three key advantages of mutual funds? (Points : 1)
Diversification, taxes, high initial investments
Low initial investments, professional management, diversification
Liquidity, high initial investments, diversification
Professional management, high initial investments, taxes
Costs, diversification, liquidity
Question 4.
4. Great Lakes Farm agreed this morning to sell General Mills 25,000 bushels of wheat six months from now at a price per bushel of $9.75. This is an example of a __________________. (Points : 1)
call option
put option
futures contract
money market security
fixed-income security
Question 5.
5. If you multiply the number of shares of outstanding stock for a firm by the price per share, you are computing the firm's ________________. (Points : 1)
equity ratio
total book value
market share
market capitalization
time value
Question 6.
6. A brokerage account in which purchases can be made using credit is referred to as which type of account? (Points : 1)
Clearing
Funds available
Cash
Call
Margin
Question 7.
7. A security originally sold by a business or government to raise money is called a(n) ________________. (Points : 1)
derivative
primary asset
primary debt
futures contract
option contract
Question 8.
8. A fixed-income security is defined as ___________________. (Points : 1)
a debt obligation that pays a fixed rate of return for a one-year period of time
common or preferred stock that pays a fixed annual dividend
a long-term debt obligation that pays scheduled fixed payments
long-term debt issued solely by a federal or state government
any security originally issued as either debt or equity that pays a fixed, pre-set payment
Question 9.
9. The total dollar return on a share of stock is defined as _______________________________. (Points : 1)
change in the price of the stock over a period of time
dividend income divided by the beginning price per share
capital gain or loss plus any dividend income
change in the stock price divided by the original stock price
annual dividend income received.
Question 10.
10. This morning, Josh sold 800 shares of stock that he did not own. This sale is referred to as a _____________. (Points : 1)
margin sale
long position
wrap trade
hypothecated sale
short sale
1. An agreement that grants the owner the right, but not the obligation, to buy or sell a specific asset at a specified price during a specified time period is called a(n) _____ contract. (Points : 1)
futures
obligatory
quoted
fixed
option
Question 2.
2. Which one of the following is the best definition of a money market instrument? (Points : 1)
Corporate debt that matures in 90 days or less
Bank savings account
Investment issued by a financial institution that matures in 30 days or less
Investment issued by a financial institution that matures in one year or less
Debt issued by the government or a corporation that matures in one year or less
Question 3.
3. Which of the following are three key advantages of mutual funds? (Points : 1)
Diversification, taxes, high initial investments
Low initial investments, professional management, diversification
Liquidity, high initial investments, diversification
Professional management, high initial investments, taxes
Costs, diversification, liquidity
Question 4.
4. Great Lakes Farm agreed this morning to sell General Mills 25,000 bushels of wheat six months from now at a price per bushel of $9.75. This is an example of a __________________. (Points : 1)
call option
put option
futures contract
money market security
fixed-income security
Question 5.
5. If you multiply the number of shares of outstanding stock for a firm by the price per share, you are computing the firm's ________________. (Points : 1)
equity ratio
total book value
market share
market capitalization
time value
Question 6.
6. A brokerage account in which purchases can be made using credit is referred to as which type of account? (Points : 1)
Clearing
Funds available
Cash
Call
Margin
Question 7.
7. A security originally sold by a business or government to raise money is called a(n) ________________. (Points : 1)
derivative
primary asset
primary debt
futures contract
option contract
Question 8.
8. A fixed-income security is defined as ___________________. (Points : 1)
a debt obligation that pays a fixed rate of return for a one-year period of time
common or preferred stock that pays a fixed annual dividend
a long-term debt obligation that pays scheduled fixed payments
long-term debt issued solely by a federal or state government
any security originally issued as either debt or equity that pays a fixed, pre-set payment
Question 9.
9. The total dollar return on a share of stock is defined as _______________________________. (Points : 1)
change in the price of the stock over a period of time
dividend income divided by the beginning price per share
capital gain or loss plus any dividend income
change in the stock price divided by the original stock price
annual dividend income received.
Question 10.
10. This morning, Josh sold 800 shares of stock that he did not own. This sale is referred to as a _____________. (Points : 1)
margin sale
long position
wrap trade
hypothecated sale
short sale
Explanation / Answer
1. option
2. Investment issued by a financial institution that matures in 30 days or less
3. Costs, diversification, liquidity
4. futures contract
5. market share
6. cash
7. primary asset
8. any security originally issued as either debt or equity that pays a fixed, pre-set payment
9. capital gain or loss plus any dividend income
10. short sale
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