Question

30. Which one of the following is correct?

1. US treasury bonds have more risk than common stock
2. Common stock has more risk than secured bonds
3. Secured bonds have less risk than US treasury bonds
4. Secured debt has more risk than unsecured debt

31. The following statements are true about mutual funds except which one:

1. Mutual funds invest mostly in private unlisted companies not public stocks
2. Mutual funds are appropriate for small investors
3. Some mutual funds charge upfront “loads”, and some do not
4. Mutual funds pool individuals’ money and invest in managed public stock portfolios

32. The term “ETF” is an abbreviation for:

1. Externally Traded Funds
2. European Traded Funds
3. Essential Traded Funds
4. Exchange Traded Funds

33. As discussed in class which of the following is correct about Warren Buffet

1. He was Secretary of the Treasury during the most recent recession
2. He bailed out accounting firm Arthur Anderson following the Enron scandal
3. He purchased cheap shares of American express after the Great Salad Oil Scandal
4. None of the above

34. The Great Salad Oil Scandal referred to a company that

1. Sold salad oil with salmonella that resulted in deaths to Americans in 1989
2. Sold rancid salad oil to Mexico that killed Mexicans in 1958
3. Almost bankrupted major brokerage firms in 1963
4. Bought crude oil from Iran and labeled it as salad oil to avoid trade sanctions in 2004

35. Which of the following is not an accepted standard for reporting financial results?

1. Global Accounting Standards and Principles (GASP)
2. International Financial Reporting Standards (IFRS)
3. Generally Accepted Accounting Principles (GAAP)

Answer 1

Answers-

1)

The correct option is B . Common stock has more risk than secured bonds. The seured bonds are not volatile andrisky like common stocks.

The other options are incorrect.
Option A - US treasury bonds have less risk than common stock.
Option C - Secured bonds have mor risk than US treasury bonds, because the US treasury bonds are backed by US government.
Option D- Secured debt has less risk than unsecured debt.

2)

The correct Option is A. The mutual funds also invest in public stocks.

The Option B is correct. The Mutual funds gives small or individual investors access to professionally managed portfolios of equities.
Option C is correct. some mutual funds do charge upfront loads and exit loads.
Option D is correct.

3)

The correct option is D.
The ETF is an abbreviation for Exchange Traded Funds.
The other Options A,B and C are incorrect.

4)

The Option C is correct.

Warren Buffet purchased cheap shares of American express after the Great Salad Oil Scandal. The stock price gradually started to increase after the scandal subsided making Buffett's one of the genius investment.

Option A - Hank paulson was the Secretary of the Treasury during the most recent recession.
Option B - Warren Buffet did not bail out accounting firm Arthur Anderson following the Enron scandal.

5)

The correct Option is C.
Almost bankrupted major brokerage firms in 1963. The Great Salad Oil Scandal known as Soybean Scandal  was a major corporate scandal in 1963 that caused over $180 million loss to American Express, Bank of America and Bank Leumi, as well as many international trading companies.

The other Option A,B and D are incorrect.

6)

The correct Option is A. Global Accounting Standards and Principles (GASP). It is not an accepted standards  for reporting financial results.

The Options B and C are accepted for financial reporting.

The International Financial Reporting Standards (IFRS) and Generally Accepted Accounting Principles (GAAP) are accepted standards  for reporting financial results.