1. Factors that should be considered in taking a stock option position include:
A: The dividend paid on the underlying stock
B: The volatility of the underlying stock
C: The time to expiration
D: The anticipated direction of market movement
E: All of the above are relevant factors in the option decision
2. Advantages of investing in tax-exempt bond funds include all of the following EXCEPT:
A: Diversification
B: Provides additional benefits to tax-deferred retirement plans
C: Automatic reinvesting
D: Fund maintains individual investor’s tax reports and records
E: Low initial deposit
3. Angie deposits $250 in an account that earns 12% per year. If no other deposits or withdrawals are made, how much will Angie have in her account at the end of 15 years?
A: $ 280
B: $ 700
C: $1,368
D: $3,450
E: $4,200
4. Zack needs a $100,000 loan to start his new business. Due to his age and inexperience, he is unable to obtain a bank loan. Possible alternatives to raise the funds include all of the following EXCEPT
A: promissory note from his mother.
B: having his mother co-sign a bank loan.
C: selling personal assets.
D: issuing debt in the market.
E: all of the above are possible sources of funds for Zack.
5. Preferred stock with cumulative fixed dividends
A: Are required to pay dividends each quarter
B: Must pay the missed dividend before common shareholders can receive dividends
C: Are taxed on the accumulated dividends
D: Are considered to be bankrupted if one year of dividends is missed
E: All of the above are true