A zero coupon bond:Is sold at a discount to face value.Is worthless.Matures immediately.Always has a call feature.
Buying on margin::Precludes the advantage of using leverage.Is not affected by limits on borrowing established by ERISA.Minimizes losses if the price of a security declines.Is possible by borrowing from a broker.
Gold may be a good investment if:Inflation is expected to increase.You like the color.World peace comes to pass.Foreign governments sell their gold reserves.
The P/E ratio:Is the same for all firms in a given industry.Does not change over time.Is typically higher for firms whose earnings are expected to grow rapidly.Is the same as the dividend yield.
Technical analysis is a technique based on factors that are inherent to the market and include:Number of shares sold on a specific day.Number of consecutive days of price increases of a stock.Changes in the direction of movement of a market index.All of the above
Stocks whose returns are tied closely to the overall national economy are typically called:Blue Chip stocks.Defensive stocks.Speculative stocks.Cyclical stocks.
Dividends are taxed:At the investor’s marginal income tax rate.At a maximum rate of 15%.Only when the stock is sold.Dividends are never taxed.
A stock certificate:Is always issued to the individual investor.Represents a primary claim on the firm’s assets.Represents ownership in a corporation.Is handwritten.
