Characteristics, Uses and Taxation of Investments - Sample Questions 1 - 7

  1. Joseph and Mary McCracken have the following bank accounts. In his own name, Joseph has $373,546.52; in her own name, Mary has $87,986.03 and jointly, they have an account with $987,901. Under current law, to what extent are they covered under SIPC rules?
    1. $0
    2. Joseph's account up to $100,000; Mary's entire account and the joint account up to $100,000.
    3. The entire joint account, up to the lesser of the account total or $100,000.
    4. Not more than $100,000 in the aggregate.
  2. With respect to futures and forwards
    1. Forwards are marked to market on a daily basis.
    2. Futures carry greater default risk than forward contracts.
    3. Futures trades are private transactions.
    4. A requirement of forwards is a high degree of creditworthiness on the part of both parties to the transaction.
  3. An investor in a hedge fund has as her primary objective
    1. Risk management.
    2. Long term capital appreciation.
    3. The ability to hedge.
    4. None of the above.
  4. The SEC was allowed to create SROs pursuant to
    1. The 1933 Act
    2. The 1934 Act
    3. SIPC
    4. The Maloney Act
  5. Real Estate investors seek the following objective
    1. Liquidity
    2. Marketability
    3. Long-term growth
    4. Tax-deferred growth
    5. Both c. and d.
  6. Warrants and options share all of the following features, EXCEPT
    1. Tradable in the secondary market.
    2. Are subject to the volatility of the underlying.
    3. Are issued by the company upon whose underlying stock they are based.
    4. May serve as a less expensive means to gain exposure to an equity security than the actual purchase of that security.
  7. REITs and Direct Participation Programs in real estate are different in the following respects, except for
    1. Liquidity.
    2. Marketability.
    3. Tax benefits.
    4. A less expensive manner in which to gain exposure to real estate than direct investment.
Sample Questions 8 - 13
Related Articles
  1. Mutual Funds & ETFs

    ETF Analysis: Vanguard Total World Stock

    Learn about the Vanguard Total World Stock exchange-traded fund, which invests in stocks located in numerous countries with a high level of diversification.
  2. Mutual Funds & ETFs

    ETF Analysis: iShares MSCI USA Minimum Volatility

    Learn about the iShares MSCI USA Minimum Volatility exchange-traded fund, which invests in low-volatility equities traded on the U.S. stock market.
  3. Mutual Funds & ETFs

    ETF Analysis: iShares US Real Estate

    Learn about the iShares US Real Estate fund, which holds shares of equity and nonequity real estate investment trusts incorporated in the United States.
  4. Mutual Funds & ETFs

    ETF Analysis: SPDR Barclays Short Term Corp Bd

    Learn about the SPDR Barclays Short-Term Corporate Bond ETF, and explore detailed analysis of the exchange-traded fund tracking U.S. short-term corporate bonds.
  5. Investing Basics

    What to Cut From Your Portfolio Right Now

    Owning stocks may shortly become too scary for your portfolio. Here's why, and here are some alternatives.
  6. Forex Strategies

    How To Avoid Exchange Rate Risk

    What are the best strategies to avoid exchange rate risk when trading?
  7. Investing Basics

    How AQR Places Bets Against Beta

    Learn how the bet against beta strategy is used by a large hedge fund to profit from a pricing anomaly in the stock market caused by high stock prices.
  8. Investing

    6 Reasons Why Every Investor Should Consider ETFs

    Once you understand the benefits of ETFs, you’ll see how they could be an exciting and smart way to help meet your financial goals. Here some key facts.
  9. Investing News

    Oil or Gold: Which Will Recover First?

    Not sure where oil and gold are headed? The answer is complex.
  10. Professionals

    Boomers’ 401(k)s are Way Out of Whack: What to Do?

    Many baby boomers have been investing heavily in equities in their 401(k)s. Now may be the time to rebalance to avoid huge losses if the market tanks.
RELATED TERMS
  1. Net Line

    The amount of risk that an insurance company retains after subtracting ...
  2. Political Risk Insurance

    Coverage that provides financial protection to investors, financial ...
  3. Maximum Drawdown (MDD)

    The maximum loss from a peak to a trough of a portfolio, before ...
  4. Gross Exposure

    The absolute level of a fund's investments.
  5. Priori Loss Estimates

    A technique used by insurance companies to calculate loss reserves.
  6. Value Of Risk (VOR)

    The financial benefit that a risk-taking activity will bring ...
RELATED FAQS
  1. Is my IRA/Roth IRA FDIC-Insured?

    The Federal Deposit Insurance Corporation, or FDIC, is a government-run agency that provides protection against losses if ... Read Full Answer >>
  2. Does index trading increase market vulnerability?

    The rise of index trading may increase the overall vulnerability of the stock market due to increased correlations between ... Read Full Answer >>
  3. What are common delta hedging strategies?

    The term delta refers to the change in price of an underlying stock or exchange-traded fund (ETF) as compared to the corresponding ... Read Full Answer >>
  4. How does being overweight in a particular sector increase risk to a portfolio?

    An investor who is overweight in a particular sector risks a loss in value for the portfolio if there is a downturn in that ... Read Full Answer >>
  5. What are the primary risks an investor should consider when investing in the retail ...

    The retail sector consists of companies operating in multiple industries such as specialty retail, general retail, food and ... Read Full Answer >>
  6. What risks do I face when investing in the insurance sector?

    Like all equity investments, insurance companies present investors with market risk. Insurance companies, like banks, also ... Read Full Answer >>
Trading Center
×

You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!