WorksheetsIntro to Finance Test #5
Total questions: 25
Worksheet time: 17mins
What is a mutual fund?
a basket of two or more securities
networks of computers that are used to communicate
the ease with which a security can be converted to cash
the difference between the bid price and the ask price
What does ETF stand for?
(a)
When do you pay a back end load?
when you buy a stock
when you increase the price of a stock
when you owe a company money
when you sell a mutual fund
Which of these options are packaged securities with expiration dates?
ETFs
UITs
REITs
ECNs
What does diversification mean?
make sure you put all your money into one stock
don't put all your eggs in one basket
talk to different investors
invest into diverse companies
What is The Trading Desk?
a company that employs traders and helps you trade
the table where traders work
the location where trades trade a stock or security
where trades come into the exchange
If an exchange is run by traders on a trading floor where
people trade in-person and are screaming everywhere,
is it an AUCTION exchange or AUTOMATED exchange?
(a)
True or False: ECNs are available 24/7, this is called liquidity.
(a)
What two risks do we take when we invest in foreign stocks?
exchange rate risk
political risk
monetary risk
fee risk
Pick the term that describes the employee of a brokerage
who sends the trading orders to the traders at the exchange.
indices
specialist
runner
broker
True or False: Broker = Advisor
(a)
Why do you pay brokers?
they can help you determine what you should be invested in
we don't pay brokers, they work for free since the government pays
they bring the trades to the investors for us
they tell us how to research about stocks and make sure to take our money
What are the two things an advisor should spend their time on?
discovering new offices to work at
finding investors to trade with
getting new clients
research
What is an advantage of online brokerages?
(a)
True or False: We should access the online brokerage and
trade stocks at coffee shops on public WIFI.
(a)
What do traders and security dealers get paid with?
salary
wage
spread
bids
What is the difference between the bid price and the stock price?
(Hint: this is a vocab word)
(a)
What should a trader find?
commodities and brokers
best price and fast execution
investors and computers
highest price and slowest time
Name a type of order:
Ex. On Close order (Do not use the example)
(a)
Low spread means:
you pay less money
you pay more money
you don't pay money
you gain money
Can we measure perception?
Yes
Maybe?
No
Not sure
What two things determines the value of stock?
people's perception of value
capital gains
cash flow
value ratios
True or False: Value ratios are composed of two parts: the price of the stock and a driver of value.
(a)
The lower the dividend, ______
the less brokers available
the cheaper the mutual fund
the more stocks you buy
the more expensive the stock
What is the one great weakness of the dividend yield?
the dividend payout ratio
the PEG ratio
the dividend relay
ECNs
