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Question
All of the following are advantages of buying call options instead of stock EXCEPT:A. options represent an opportunity to control shares of stock without making a large dollar commitment.
B. commissions on stock trading are greater than those on options trading.
C. options can be quite conservative and used to reduce risk.
D. All of the above are advantages
Answer
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Related questions
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The two types of investments that provide the highest and lowest yields in the Ibbotson study of Stocks, Bonds, Bills and Inflation are:
A.large company stocks and U.S. treasury bills.
B.large company stocks and long-term government bonds.
C.small company stocks and U.S. treasury bills.
D.small company stocks and preferred stock.
E.U.S. treasury bills and small company stocks.
Q:
The difference between the cash market and the futures market is:
A.that commodity prices cannot be negotiated in the futures market, while they can be in the cash market.
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D.that the commodities are usually less expensive in the futures market.
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Corn futures are traded on the:
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B.Chicago Board of Trade.
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Assume you have purchased a contract for 25,000 British pounds for $35,000. Your margin requirement is $2,000. If the value of a pound increases .01, what is your percentage profit?
A.10.0%
B.12.5%
C.15.0%
D.8.0%
E.None of the above
Q:
In order to be listed on an exchange, a firm must meet minimum standards pertaining to the following criteria:
A.the number of common shares publicly held.
B.the net income of the firm.
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Q:
The Securities Investor Protection Corporation (SIPC) was established to:
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B.protect investors from corporate insider trading, and insure their accounts for $500,000 in case corporate fraud caused a company to go bankrupt.
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D.create an insurance pool for brokerage firms, so that if one firm went bankrupt, all investor losses would be covered out of the insurance pool.
Q:
Program trading
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B.has been argued to affect the market by accelerating price movements.
C.relies on mathematical algorithms.
D.All of the above
Q:
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A.Trading takes place by telephone or electronic network
B.It is regulated by the Securities and Exchange Commission and the National Association of Securities Dealers
C.Government securities of the U.S. Treasury provide the largest dollar volume.
D.All of the above are true
Q:
An employee of an investment house who executes orders on the floor of the exchange for customers of the firm is called a:
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B.registered trader.
C.commission broker.
D.specialist.
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Q:
From the investment banker's point of view, the major reason syndicates are formed in the distribution of large issues is for the purpose of:
A.improving the liquidity of the issue.
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Q:
A means of exchanging assets, which may or may not include a specified location, and in which the seller may or may not own the assets being sold, is called:
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Q:
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Q:
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In an efficient market environment, it is reasonable to assume that the higher the premium on a target company's stock, the less the risk of cancellation.
Q:
Given the following financial data: net income/sales = 6%, sales/total assets = 2.5X, and debt/total assets = 25%, compute the return on assets and return on equity.ROA = 15.0%ROE = 20.0%
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Q:
You would find the payment of dividends in the statement of cash flow under:
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Q:
The value of a bond at any given time is the sum of:
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C.the future value of the interest payments and the future value of the par value.
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Inflationary expectations have no effect on bond prices.
Q:
The approximate yield to maturity method tends to understate the true yield for bonds trading at a discount.
Q:
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Q:
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Q:
What would be the current yield of a 6% coupon bond priced at $950?
Q:
A 15-year, 7% coupon rate bond is selling for $771.82. What is the current yield of the bond?A.22.8%B.7.0%C.9.1%D.10.0%E.30.7%
Q:
The impact of interest rate changes on bond prices can be magnified by:
A.investing in speculative high-risk high-yield bonds.
B.investing in higher-quality corporate bonds.
C.investing in short-term bonds.
D.More than one of the above
Q:
The market segmentation theory focuses on:
A.the impact of institutional investors on the yield curve.
B.the maturity preferences of banks and those of life insurance companies.
C.phases of the business cycle.
D.All of the above
Q:
Assume a $1,000 Treasury bill is quoted to pay 10% and matures in 3 months.a) How much interest would an investor receive?b) What will be the price of the Treasury bill?c) What will be the true rate of return?