1.                  If the NASDAQ had a return of 70% last year and the DJIA returned 20%, which index would investment theory assume to have a greater risk to invest in?  Why?

2.                  The stock of GM went from $50 to $80 last year.  The firm also paid a dividend of $3.  Compute the rate of return.

3.                  What is one of the main functions of an investment bank?

4.                  How is the Dow Jones Industrial Average (DJIA) different from the S&P 500 Stock Index?

5.                  Assume you buy 100 shares of stock at $20 on margin (60 percent).  If the price rises to $30, what is your percentage gain in equity?

6.                  List four major categories of financial information available to investors.

7.                  What does top-down investing mean?  How is it different from bottom-up investing?

8.                  Distinguish between monetary and fiscal policy.

9.                  Since 1926 the U.S. Treasury bill rate has averaged 3.8% and large company stocks returned 12.7%.  What is the equity risk premium over this period of time?

10.              What is the difference between a primary and secondary market?

11.              You sell 100 shares of Yahoo short at $360.  Assuming that you had $36,000 of equity in your account, what would your profit or loss be if Yahoo increased to $400?

12.              The SEC requires corporations to file a 10-K report.  What type of information is contained in this report?

13.              List three industries that are very sensitive to the business cycle.

14.              How does the Taxpayer Relief Act of 1997 affect the attractiveness of capital gains versus dividend income?

15.              Is day trading stock an example of speculating or investing?  Why?

16.              What is the difference between a Roth and a Traditional IRA?

17.              What web site other than Barron’s carries their top twenty investing web sites?

18.              What impact does the Federal Reserve raising the discount rate three times in a row generally have on the equity markets?

19.              What is the difference between a real and a financial asset?

20.              What is a stop-loss order?  Why do stock traders place this type of order?