finance 260 exam 2 test file
T or F- The term Equity security implies an ownership interest in a corporation - ANSTrue
T or F- The contractional contract which spells out the obligation of the issuer of a debt security
is called the indenture - ANSTrue
T or F- the dividend yield of a share of a stock is the total value of the company divided by its
earnings - ANSfalse
T or F- when an investor buys common stock he must pay9 the price of the stock plus interest -
ANStrue
T or F- in the over the counter market such as NASDAQ a dealer holds an inventory of stock
and buys from willing sellers - ANStrue
T or F- a corporate officer who has access to privileged information would be guilty of selling
short - ANSfalse
T or F- a market guru who charts stock prices on an hourly basis to discern particular patterns in
order to to time his purchases and sales is probably using fundamental analysis - ANSfalse
T or F- the standard and poors 500 is an example of a capitalization weighted stock market
index - ANStrue
T or F- market timing is the single most effective way to achieve superior portfolio performance -
ANSfalse
T or F- if a portfolio has less than optimal diversification it is possible to increase return without
increasing risk - ANStrue
T or F- the law of large numbers states that as the number of events increases the greater the
likelyhood that your results will approximate your expected results - ANStrue
T or F- systematic risk is all those parts of risk that can be reduced or eliminated by
diversification - ANSfalse
T or F- the majority of a portfolios return can be explained by its asset allocation - ANStrue
T or F- over the long term it is reasonable to expect the typical mutual fund managers skill will
add 3 to 4% annually to a funds investment return - ANSfalse
T or F- The term Equity security implies an ownership interest in a corporation - ANSTrue
T or F- The contractional contract which spells out the obligation of the issuer of a debt security
is called the indenture - ANSTrue
T or F- the dividend yield of a share of a stock is the total value of the company divided by its
earnings - ANSfalse
T or F- when an investor buys common stock he must pay9 the price of the stock plus interest -
ANStrue
T or F- in the over the counter market such as NASDAQ a dealer holds an inventory of stock
and buys from willing sellers - ANStrue
T or F- a corporate officer who has access to privileged information would be guilty of selling
short - ANSfalse
T or F- a market guru who charts stock prices on an hourly basis to discern particular patterns in
order to to time his purchases and sales is probably using fundamental analysis - ANSfalse
T or F- the standard and poors 500 is an example of a capitalization weighted stock market
index - ANStrue
T or F- market timing is the single most effective way to achieve superior portfolio performance -
ANSfalse
T or F- if a portfolio has less than optimal diversification it is possible to increase return without
increasing risk - ANStrue
T or F- the law of large numbers states that as the number of events increases the greater the
likelyhood that your results will approximate your expected results - ANStrue
T or F- systematic risk is all those parts of risk that can be reduced or eliminated by
diversification - ANSfalse
T or F- the majority of a portfolios return can be explained by its asset allocation - ANStrue
T or F- over the long term it is reasonable to expect the typical mutual fund managers skill will
add 3 to 4% annually to a funds investment return - ANSfalse
