QUESTION 3

1. A capital gain on a security is a return resulting from

   		a change in price
   		dividends paid
   		coupon interest
   		a reduction in risk

QUESTION 6

1. A decrease in the price of a fixed-rate bond is equivalent to

   		a reduction in risk associated with treasury bills
   		an increase in the bonds yield
   		an increase in wealth
   		all of these

1. A positive feedback loop where prices continue to rise as investors gain confidence and talk up the market is called

   		social contagion
   		empirical efficiency
   		loss aversion
   		the January effect

		priced to sell
		one that offers protection from inflation risk
		a bond that sells on the over-the-counter (OTC) market
		collateral pledged to secure the bond

QUESTION 21

1. Covenants

   		discourage undesirable behavior
   		encourage desirable behavior
   		keep collateral valuable
   		any of these

QUESTION 28

1. Larger, more established companies are more likely to issue securities to raise funds. This is called

   		economies of scope
   		a pecking order
   		contagion
   		risk diversification

QUESTION 33

1. Stocks of assets are the

   		amounts at a given point in time
   		total held by financial institutions
   		transactions total over a single business cycle
   		equity (total assets less total liabilities)

QUESTION 34

1. That a poor current relative performance should lead to a good future relative performance is called

   		backwardation
   		mean reversion
   		abstract correlation
   		contradictory evidence

QUESTION 40

1. The investment dartboard is

   		a list of the largest companies in a single market
   		randomly picked stocks to be used as a benchmark
   		a historical measure used to disprove efficient markets
   		technical analysis of the stock market

QUESTION 44

1. The shareholders who hire managers to run their company for them would be the

   		capital project investors
   		agents
   		portfolio managers
   		principals

QUESTION 49

1. When the quantity demanded (or supplied) at a given price (interest rate) of a bond in response to a factor other than price or interest rate, a __________ occurs.

   		shift
   		backwardation
   		reversion to the mean
   		risk reduction