Investor Survival Quiz

1. By regulation, your brokerage firm may issue a margin call requiring you to deposit additional funds or stocks when the equity in your margin account falls below what level? (READ LIST)
60 percent
50 percent
25 percent
10 percent
NONE OF THESE
DON'T KNOW/UNSURE

2. Let's assume that you buy a stock for $30 a share. It has a history of rapid up and down movements. You want to be sure to sell the stock if it reaches $40 a share -- a $10 profit. However, you return from a two-week vacation to find that the stock traded as high as $48 and is now down to just $25 a share. What would have been the EASIEST way to get a $10 a share profit -- rather than losing $5 a share? (READ AND ROTATE. RECORD ONE ANSWER)
Cancel your vacation
Use a market order when buying the stock
Go on vacation, but monitor the financial news and stay in close touch with your broker
Use a limit order to sell at $40
NONE OF THESE
DON'T KNOW/UNSURE

3. A company in which you hold stock files for Chapter 11. What does that mean? (READ AND ROTATE. RECORD ONE ANSWER)
The company intends to merge with another company
The company is seeking protection under bankruptcy law and ceases all operations
The company is issuing a quarterly profit-and-loss statement
The company is seeking protection under bankruptcy law and intends to reorganize itself
NONE OF THESE
DON'T KNOW/UNSURE

4. If you suspect that there is a problem with the way your brokerage firm or stockbroker is handling your account, you should do which of the following things FIRST in order to protect your interests? (READ AND ROTATE. RECORD ONE ANSWER)
Call the stockbroker and give him or her a chance to work out the problem
Call the broker's branch office manager or compliance department and make a complaint
Set out your concerns in writing to the brokerage firm and keep a copy for yourself
ALL OF THESE
NONE OF THESE
DON'T KNOW/UNSURE

5. Which of the following organizations insures you against losing money in the stock market or as the result of investment fraud? (READ AND ROTATE. RECORD ONE ANSWER)
Securities and Exchange Commission
Federal Deposit Insurance Corporation
Securities Investor Protection Corporation
ALL OF THESE
NONE OF THESE
DON'T KNOW/UNSURE

Score =
Correct answers: