FI306 FINAL EXAM CORRECT 100%
index - ANSWERa list or group of stocks
main use of index - ANSWERbenchmark to evaluate performance
mutual fund - ANSWERa pool of money to diversify investments
ETF - ANSWERput own capital into diversified investments and create units
Equal Weighted or Value Weighted riskier? - ANSWEREqual Weighted
Value Weighted Index - ANSWERIndex proportional to market values
Price Weighted Average - ANSWERcomputed by adding prices of stocks and dividing
by a divisor
Equal Weighted Index - ANSWERcomputed from a simple average of returns
2-for-1 split - ANSWERfor every 1 share before split, you now have 2 shares
Regular split - ANSWERattracts small investors because they can diversify easier
Reverse split - ANSWERincrease price per share if distressed
margin buying - ANSWERpurchasing assets with borrowed money
bid - ANSWERprice investor can sell stock to dealer
ask - ANSWERprice investor can buy stock from dealer
maintenance margin - ANSWERcomputed by how low stock can go for you to get your
loan back as the dealer
market order - ANSWERbuy/sell at prevailing market price and only specify number of
shares
limit order - ANSWERspecify number of shares and price
stop-loss order - ANSWERsell if price at or below specified price
stop-buy order - ANSWERbuy if price is at or above specified price
Arithmetic return use - ANSWERuse for future predictions
index - ANSWERa list or group of stocks
main use of index - ANSWERbenchmark to evaluate performance
mutual fund - ANSWERa pool of money to diversify investments
ETF - ANSWERput own capital into diversified investments and create units
Equal Weighted or Value Weighted riskier? - ANSWEREqual Weighted
Value Weighted Index - ANSWERIndex proportional to market values
Price Weighted Average - ANSWERcomputed by adding prices of stocks and dividing
by a divisor
Equal Weighted Index - ANSWERcomputed from a simple average of returns
2-for-1 split - ANSWERfor every 1 share before split, you now have 2 shares
Regular split - ANSWERattracts small investors because they can diversify easier
Reverse split - ANSWERincrease price per share if distressed
margin buying - ANSWERpurchasing assets with borrowed money
bid - ANSWERprice investor can sell stock to dealer
ask - ANSWERprice investor can buy stock from dealer
maintenance margin - ANSWERcomputed by how low stock can go for you to get your
loan back as the dealer
market order - ANSWERbuy/sell at prevailing market price and only specify number of
shares
limit order - ANSWERspecify number of shares and price
stop-loss order - ANSWERsell if price at or below specified price
stop-buy order - ANSWERbuy if price is at or above specified price
Arithmetic return use - ANSWERuse for future predictions
