Securities market

You are considering purchasing stock in two companies: Company A and Company B.

- Company A has a history of high volatility but offers high potential returns.

- Company B has steady growth with low volatility and stable dividends.
Which type of investor would likely prefer Company B's stock?

• Risk-averse investor

• Aggressive investor

• Speculative investor

• Short-term investor

When you buy shares, you acquire:

• A loan to the company

• Ownership of a portion of the company

• A bond

• A right to a dividend only

You have the option to invest in a government bond or a corporate bond. The corporate bond offers a higher yield, but the government bond is safer.
Which of the following is typically more liquid?

• Government bonds

• Corporate bonds

• Real estate

• Mutual funds

Which factor affects the liquidity of a bond?

• The issuing company’s credit rating

• The maturity date of the bond

• The bond’s coupon rate

• All of the above

You decide to invest in a bond with a 10% yield and a stock with an expected return of 15%. The market has high volatility.
If the market crashes and the bond loses 5% of its value, what would be your adjusted return on the bond investment?

• 5%

• 10%

• 15%

• -5%

Which of the following investment types typically offers the highest investment multiplier (return on investment relative to initial amount)?

• Treasury bills

• High-growth stocks

• Corporate bonds

• Real estate

You own bonds that are relatively illiquid, and you need to sell them quickly for an urgent expense.

What is the primary risk of holding an illiquid asset like a low-rated corporate bond?

• The bond may default.

• The asset is difficult to sell quickly without a price discount.

• The asset will provide lower returns.

• There is no risk associated with illiquid bonds.

Which of the following bond types would likely be the most liquid?

• A bond issued by a small startup

• A US Treasury bond

• A municipal bond

• A bond from a medium-sized corporation

You have $10,000 to invest. You have two options:

- Option A: A diversified portfolio with 60% in bonds (government bonds, high-grade corporate bonds), and 40% in shares (blue-chip companies).

- Option B: A riskier portfolio with 50% in high-growth tech stocks and 50% in high-risk corporate bonds.

Which portfolio would likely provide higher liquidity?

• Option A

• Option B

• Both portfolios are equally liquid

• Neither portfolio is liquid

Assuming you are a conservative investor, which portfolio would you most likely choose?

• Option A

• Option B

• A mix of both

• Neither