i23.docx - 1. The issuer of a bond is a lender. a. True b....

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1. The issuer of a bond is a lender.a. Trueb. FalseANSWER:False
2. When an investor buys shares of stock, those stocks must be held for a specified period of time before they can be sold.
3. Unlike the New York Stock Exchange, NASDAQ is an electronic stock market with trades executed through asophisticated computer and telecommunications network.
4. The three major components of a bond are the bond price, maturity date, and coupon rate.
5. Another term for astockbrokeris anaccount representative.a. Trueb. FalseANSWER:True
6. The Wilshire 5000 stock index is made up of the stocks of 5,000 of the largest U.S. companies.
7. The longer you hold stocks in the stock market, the more likely you will earn a positive return, ceteris paribus.
8. A stock with a price-earnings ratio of 11.2 means that the stock is selling for a closing share price that is 11.2 times itslatest available net earnings per share.
9. If the stock market quote in the newspaper reads 752 in the column headed “Vol 00s”, it means that 752 shares of thisstock were traded on this particular day.a. Trueb. FalseANSWER:False
10. A low price-earnings ratio usually indicates that people believe that this corporation will have lower than averagegrowth in earnings.
11. A stock is purchased either for the expected gain in the price of the stock, for the dividends that the stock may pay, orboth.
12. Bonds that are rated in the D category are of higher quality than bonds that are rated in the A category.
13. If you are buying a bond that is newly issued by the corporation, you are buying it in the primary market.a. Trueb. FalseANSWER:True
14. If the bid value of a Treasury bond is listed as “112:16”, it means that the buyer is willing to pay $1,125 for the bond.
15. Applied to any investment, the phrase “there’s no such thing as a free lunch” means that higher returns come withlower risks, and lower returns come with higher risks.
16. Treasury bonds are so safe (risk-free) that they often pay relatively low returns.

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Term
Spring
Professor
BassamY.Yousif
Tags
Macroeconomics, b Bond B, c Bond C, issuer of a bond

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