1. Which of the following is considered by many to be the best single indicator of the U.S. equities market?
A. NASDAQ Composite
B. Russell 2000
C. Dow Jones Industrial Average
D. Standard & Poor's 500

2. Marco is a bullish investor, but the stock market is currently bearish. What is Marco most likely to do?
A. Sell every stock and go to a 100 percent cash position.
B. Sell certain winning stocks to realize a profit and put the cash to work when the market decline appears to have ended.
C. Maintain all stock positions until the market completely recovers and then buy more stocks.
D. Sell losing stocks to avoid further losses, and hold onto winners.

3.Kim has investments in stocks, and wants to calculate her total return. What should she do?
A. Divide the yearly dollar amount of dividend income by the investment's current market value.
B. Compare the dividend against current yields from other investments.
C. Subtract the cost of the stock from what she sold it for.
D. Divide the current dividend payment plus capital gain by the original investment.

4. Which of the following are stocks, bonds, and mutual funds representing secured, or financially viable, claims on the part of investors?
A. private placements
B. securities
C. exchanges
D. commodities

5. What is the term for the proportion of funds invested in each of several investment alternatives?
A. spreading
B. shorting
C. margin buying
D. asset allocation

6. Which of the following statements is true about common stocks as investments?
A. Stocks are among the riskiest of all investments.
B. Stocks are most suitable for investors who seek security.
C. Stocks will never become worth less than their purchase price.
D. Stock prices reflect only government action.

7. Peter Kim wanted to buy a new car. To help finance the purchase, he decided to sell his Organic Markets bond in the secondary market. Peter's bond had a par value of $10,000 and a coupon of 6 percent. Current interest rates were 3 percent. What would Peter's bond sell for?
A. for par value
B. for $10,600
C. at a discount to par value
D. at a premium to par value

8. Which of the following is an organization of individuals coordinated to provide an institutional setting in which stock can be bought and sold?
A. stock exchange
B. brokerage
C. server
D. over-the-counter market

9. Which of the following is a summary of price trends in a specific industry and/or the stock market as a whole?
A. investment index
B. average index
C. market indicator
D. market index

10. Which of the following is a formal pledge (an IOU) obligating the issuer to pay interest periodically and repay the principal at maturity (a preset future date) to the lender?
A. commercial bank loan
B. corporate bond
C. mutual fund
D. bond indenture

11. Which of the following is an advantage of ETFs over mutual funds?
A. ETFs can be traded throughout the day like a stock.
B. ETFs have high operating expenses.
C. ETFs require high initial investments.
D. ETFs are not regulated by the government.

12. What is the term for a division of stock that gives stockholders a greater number of shares but does not change each individual's proportionate share of ownership?
A. stock dividend
B. stock split
C. stock yield
D. stock warrant

13. What is the term for a division of stock that gives stockholders a greater number of shares but does not change each individual's proportionate share of ownership?
A. stock dividend
B. stock split
C. stock yield
D. stock warrant

14. Shawna has gotten into investing and is interested in aggressive growth funds. Which of the following must be true about Shawna?
A. She is interested in the best possible returns over time.
B. She is interested in making money as quickly as possible.
C. She has comparatively little money to invest.
D. She wants to make as secure an investment as possible.

15. Which stock exchange has the highest volume of shares traded?
A. American Stock Exchange
B. New York Stock Exchange
C. NASDAQ
D. Philadelphia Stock Exchange

16. What is the term for buying several different kinds of investments rather than just one?
A. spreading
B. shorting
C. margin buying
D. diversification

17. Hugh is an investor who opts for no-risk U.S. Treasury Bills and intermediate-term high-grade corporate bonds. What kind of investor is Hugh? ?
A. professional
B. aggressive
C. amateur
D. conservative

18. Twenty-six-year-old Lisa Lamont became an investor one day after a friend explained that there was a much better way to make her money work for her than by letting it sit in a savings account earning a very low rate of interest. Lisa decided to withdraw $10,000 from her savings account and invest it in stocks. She wanted to invest it in such a way as to minimize her risk. Which one of the following strategies makes the most sense for a new investor like Lisa?
A. Invest all $10,000 in a small fast-growing computer company.
B. Invest $5,000 in a gold mining company and $5,000 in a silver mine.
C. Invest the $10,000 in four different home builders.
D. Invest $10,000 in a large-cap mutual fund.

19. Which of the following is an electronic securities exchange?
A. Pacific Stock Exchange
B. NASDAQ
C. Osaka Securities Exchange
D. Securities and Exchange Commission

20. New stocks and bonds are sold in what market?
A. private placement market
B. secondary market
C. primary market
D. tertiary market