The Dow Jones Industrial Average consists of 500 different stocks that change an

Question

The Dow Jones Industrial Average consists of 500 different stocks that change annually. 30 stocks that are considered representative of the market a whole. the top-selling 250 stocks over a 10-year period 60 stocks selected from the NYSE, the NASDAQ-AMEX. and the OTC market. When you invest in a mutual fund. your money is invested in a variety of insurance policies, you have easier access to your money than in a savings account. your money is invested in a variety of stocks and bonds. you are guaranteed a fixed return on your investment. You do not have to pay state taxes on interest earned on corporate bonds. money market mutual funds. treasury bills. junk bonds. All of the following are low-risk investments EXCEPT junk bonds. municipal bonds. treasury bonds. savings bonds All of the following are basic components of bonds EXCEPT maturity. par value. liquidity. coupon rate. A stock split is most likely to occur when company is losing money. stockholders demand higher dividends. the price of a stock becomes too high. the stock market as a whole is doing poorly. A stock that reinvests its earrings in the business instead of paying regular dividends is called an income stock. preferred stock. common stock. a growth stock. The most trades are made on the New York Stock Exchange. on the NASDAQ-AMEX. the Chicago Board of Trade. on the OTC market. You realize that many students who come to early morning hockey practice do not get up early enough to breakfast. You borrow $500 from your parents to start a bagel delivery service to the hockey rink in the mornings. You are acting as a supplier in the capital market. a financial capital investor an entrepreneur. an intermediary. In June. Leslie wins a cash prize of $2,000. She plans to use this money to pay her tuition bill in September Leslie puts this money in a savings account because her main priority is receiving the maximum amount of interest possible. taking a risk in hopes that she'll get a high return. liquidity, since she'll need to use the money in a short time. making a safe long term investment Against your better judgment, you lend S100 to your cousin Manny, who has a reputation for failing to pi back loans. You are taking a liquidity risk inflation rate risk. time risk. credit risk.

Explanation / Answer

10) B - The Dow Jones industrial average is the representative of 30 stocks that represent the whole market.

11) C – the money gets invested in a variety of stocks and bonds.

12) B – treasury bill, but they are taxed on the federal level.

13) A – Junk bonds, these are high-risk bonds.

14) B – liquidity – liquidity is associated with the risk in the market.

15) C – the price of the stock becomes too high as the high values result in high liquidity for the company.

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