1. If a corporation pays a dividend, which group receives priority in receiving the dividend?
- bond holders
- holders of preferred stock holders of common stock
- dividends are evenly divided by holders of common and
- preferred stock
2. Hedgers are primarily interested in:
- betting on anticipated changes in prices.
- increasing market liquidity.
- reducing their exposure to the risk of price fluctuations.
- reducing the spread between bid and ask prices on bonds.
3. According to the efficient markets hypothesis, who is most likely to benefit from frequently moving funds from one asset to another?
- big investors
- small investors
- only those who consistently beat the market
- your broker
4. When talking about forward contracts, the date on which the contracted delivery must take place is called:
- the counterparty date
- forward date
- spot date
- the settlement date
5. In Wall Street Jargon, a "Bear Market" typically means:
- stock prices have declined by at least 20%.
- stock prices have risen by at least 20%.
- stock prices have risen by at least 50%.
- stock prices have declined by at least 50%.