Semi 6

What can the Rule of 72 be used for in the area of investments?

• Calculate the price of a stock

• Calculate how many years it takes to double the capital invested.

• Estimate the value of a company

• Calculate the risk of an investment

How is the market value of a stock determined?

• Profit-seeking potential

• Interest rates

• Number of shares available

• How much buyers are willing to pay

All companies pay dividends every year.

• True

• False

Which is the largest stock market in the world in terms of volume of trading?

• Toronto Stock Exchange

• New York Stock Exchange

• London Stock Exchange

• Tokyo Stock Exchange

What type of market is indicated by the red arrow?

• Bear

• Bull

• Giraffe

• Lion

New stocks and bonds are sold in what market?

• Open market

• Secondary market

• Primary securities market

• Tertiary market

Why should an investor consider diversification and asset allocation?

• To increase total returns

• To achieve desired risk-return balance

• To achieve higher dividend yields

• To improve price-appreciation values

How can a company raise capital?

• With long-term loans

• by bond issuance

• with equity financing

• All three are true

The use of special knowledge about a firm, which results in an unfair advantage or generates profit or other types of gain, is known as what?

• Prospectus information

• Equity financing

• Insider trading

• FINRA violation

According to rating services such as Moody's, what type of rating would a bond have if it was one of the safest investments possible, but produced lower returns?

• BBB

• CCC

• AAA

• D