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Finance Test #2, Part #1

True/False
Indicate whether the statement is true or false.
 

 1. 

(3 points) Series HH bonds are no longer issued.
 

 2. 

(3 points) A margin call is when a customer’s commodity trading account exceeds the amount of money it is allowed to have and the customer is asked to withdraw some funds from his or her account.
 

 3. 

(3 points) Munis is another name for corporate bonds.
 

 4. 

(3 points) A foreigner may own U.S. Savings Bonds if they are a civilian employee of the U.S. Government.
 

 5. 

(3 points) Generally, you do not pay income tax on the interest earned on municipal bonds.
 

 6. 

(3 points) Stocks are normally bought and sold through brokers.
 

 7. 

(3 points) The Chicago Board of Trade was established in 1948.
 

 8. 

(3 points) A shareholder is the company who issues the stock when a company goes public.
 

 9. 

(3 points) Minors may own U.S. Savings Bonds with no stipulations or restrictions.
 

 10. 

(3 points) There is great potential for making a large profit when investing in collectibles.
 

 11. 

(3 points) The truest indicator of the value of stock is the price at which a share of stock can be bought and sold on the stock market. This is known as the stock’s market value.
 

 12. 

(3 points) Another name for a futures contract is a forward contract.
 

 13. 

(3 points) One negative about investing in real estate is the general upkeep of the property.
 

 14. 

(3 points) When investing in stocks, the potential for making a high profit is better than other investments, but the potential for losing money is also high.
 

 15. 

(3 points) When dealing with fixed rate mortgages, a change in the mortgage percentage rate rarely has any real change on the amount of interest paid to the lender over the life of the loan.
 

 16. 

(3 points) Common stock has no stated dividend rate.
 

 17. 

(3 points) Diversification is a tremendous benefit of commodity investing.
 

 18. 

(3 points) The need for futures developed because there were years where demand for grain would be high and there wouldn’t be enough to meet the demand, causing those businesses to pay outrageous prices for grain; in other cases, the surplus of grain would lower prices so much that farmers could not make any money.
 

 19. 

(3 points) Preferred stockholders have no stated dividend rate on their stock.
 

 20. 

(3 points) A speculative investment is one that is considered to be very risky.
 

 21. 

(3 points) When investing in collectibles, coins and stamps are slightly better than other collectibles because they have actual monetary value and are commonly collected.
 

 22. 

(3 points) An advantage to investment clubs is the financial risk can be spread over many stocks and there are more people researching stocks for more information.
 

 23. 

(3 points) Bonds are basically loans to corporations and governments.
 

 24. 

(3 points) You are limited to $100,000 of Series I bonds each year.
 

Multiple Choice
Identify the choice that best completes the statement or answers the question.
 

 25. 

(3 points) Which of the following is NOT generally considered positive when investing in real estate?
a.
You have to pay property tax
c.
Real estate generally appreciates
b.
Gives the owner somewhere to live
d.
Increase in equity
 

 26. 

(3 points) Which of the following is NOT an example of a commodity that is bought and sold at either the Chicago Board of Trade or the Chicago Mercantile Exchange?
a.
livestock
c.
precious metals
e.
currency
b.
stocks
d.
grain
 

 27. 

(3 points) Who is credited with establishing the first futures market?
a.
The British
c.
The Chinese
b.
The Japanese
d.
The United States of America
 

 28. 

(3 points) Treasury Notes are sold in increments of .........
a.
$1,000
b.
$10,000
c.
$25
d.
$5,000
 

 29. 

(3 points) ____________ are short-term securities that mature in one year or less from their date of issue.
a.
Series EE Bonds
c.
Treasury Bonds
b.
Series I Bonds
d.
Treasury Bills
 

 30. 

(3 points) Which of the following is NOT traded at the Chicago Board of Trade?
a.
rough rice
c.
oriented strand board
e.
wheat
b.
gold
d.
soybean meal
 

 31. 

(3 points) Which of the following is not a common collectible in which people invest?
a.
coins
c.
pogs
e.
stamps
b.
antiques
d.
sports cards
 

 32. 

(3 points) Which of the following is a type of stock?
a.
common
b.
Series I
c.
interest bearing
d.
discount
 

 33. 

(3 points) Which is NOT a type of U.S. Savings Bond discussed in your notes?
a.
Series HH
b.
Series I
c.
Series EE
d.
Series G
 

 34. 

(3 points) If you were to invest in Live Cattle, Lean Hogs or Pork Bellies, at which commodities exchange would you buy them?
a.
Chicago Board of Trade
c.
Osaka Rice Exchange
b.
Chicago Mercantile Exchange
d.
New York Stock Exchange
 

 35. 

(3 points) When you buy into a company, you purchase __________.
a.
bonds
b.
bills
c.
notes
d.
stock
 

 36. 

(3 points) Which of the following is NOT traded at the Chicago Mercantile Exchange?
a.
boneless beef
c.
pork bellies
e.
live cattle
b.
cheese
d.
soybeans
 

 37. 

(3 points) Most hedgers can be broken into one of five categories; which one listed below is NOT one of those categories?
a.
Farmers
c.
Processors
e.
Feedlot Operators
b.
Feed Salesman
d.
Exporters
 

 38. 

(3 points) A printed certificate with a promise to pay a definite amount of money at a stated interest rate on a specified maturity date is the basic definition for:
a.
interest
b.
bond
c.
IRA
d.
stock
 

 39. 

(3 points) Profits from stock ownership are paid to stockholders in the form of .........
a.
checks.
b.
cash.
c.
interest.
d.
dividends.
 

Numeric Response
 

 40. 

(3 points) What was the value of DWDP Stock on 2/25/19? (do not include the dollar sign in your answer; do include the decimal point)

 



 
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