1. Pre-Test M/C
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Questions and Answers

What is the main responsibility of fund managers?

  • Regulating the issuance of securities
  • Enforcing insider trading rules
  • Choosing which securities to buy and sell (correct)
  • Disclosing financial information to the public
  • Which type of investment competes with other investments for funds?

  • Ownership investments
  • Corporate stock
  • Savings accounts
  • Mortgage-backed securities (correct)
  • What is the key characteristic of a safe investment?

  • Return on investment guarantee
  • Quick liquidity conversion
  • Little risk of losing money (correct)
  • High yield potential
  • What does liquidity refer to in investments?

    <p>Quick conversion into cash</p> Signup and view all the answers

    Which type of investment locks up investor funds?

    <p>Mortgage-backed securities</p> Signup and view all the answers

    In what way can mortgages be utilized in investment?

    <p>By pooling and securitizing them as mortgage-backed securities</p> Signup and view all the answers

    What is the key characteristic that investors look at regarding investment advantages?

    <p>Safety, liquidity, and yield</p> Signup and view all the answers

    What makes an investment liquid?

    <p>Quick cash conversion</p> Signup and view all the answers

    What is the primary function of the federal Securities and Exchange Commission (SEC)?

    <p>Enforcing financial disclosure by companies</p> Signup and view all the answers

    Which type of investment provides ownership in a company?

    <p>Corporate stock</p> Signup and view all the answers

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