Question

6.) A type of security transaction that uses borrowed funds to purchase securities is referred to as?

A. Short Selling

B. Long Purchase

C. Margin Trading

D. Option Trading

7.) The type of securities transaction where investors make a profit when stock prices go down is referred to as?

A. Short Selling

B. Long Purchase

C. Margin Trading

D. Option Trading

8.) An order to buy or sell stock at the best price available when the order is placed is referred to as?

A. Limit Order

B. Market Order

C. Odd-lot order

D. Stop-Loss Order

9) The two components (sources) of total return include:

A. Capital Gain/losses and Income

B. Capital Gain and Capital Loss

C. Interest Income and Dividend Income

D. None of the above.

10) A popular measure of market risk, also known as systematic or undiversifiable risk is referred to as?

A. Standard Deviation

B. Variance

C. Coefficient of Variation

D. Beta

Answer 1

6)Correct option is "C"

an act of purchasing securities using borrowed funds is called margin trading .

7)Correct option is "A"

In case of short selling ,investors will make profit if price goes down since you will buy the securities at low price and sell them at high cost

8)Correct option is "A"

Limit order is an order to buy or sell securities at a specific or better price .

9)Correct option is "A"

Total return comprise of capital gain(loss)yield and Dividend (interest) yield

10)Correct option is "D"

Beta is a measure of systematic(non diversifiable)risk .