1. Identify the meaning of basic investment terms.
2. Identify the relationship between risk and the expected return on an investment.
3. Match each type of investment risk (business, financial, event, market, purchasing power, interest rate, liquidity, and event risk) with the statement which best describes it.
4. Calculate the yield on a stock investment using the holding period return formula.  (Remember, the HPR formula is only appropriate for investment time horizons of one year or less)
5. Compute the annual yield on an investment using time value of money tables, financial calculators, calculators on the Web, or the approximate yield formula.
6. Differentiate between cash dividends and stock dividends.
7. Identify the purpose of stock splits, and compute the number of shares an investor would own after a stock dividend and/or a stock split.
8. Distinguish between organized exchanges, the over-the-counter market, and electronic communication networks (ECNs).
9. Interpret basic information from a Value Line Investment Survey report.
10. Interpret a stock quote from the Wall Street Journal.
11. Identify the best financial newspaper for information on daily stock market activity.
12. Identify two websites which provide extensive stock research for free.
13. Recommend which type of common stock (blue-chip, growth, income, speculative, cyclical, defensive) would be most appropriate, given a description of an investor's objective and/or temperament.
14. Apply the PEG method (comparing the price-earnings ratio to the projected earnings growth rate to determine whether the stock is overvalued or undervalued).
15. Interpret the beta of a stock.
16. Differentiate between cash and margin purchases.
17. Distinguish between buying long and selling short.
18. Differentiate between a market and limit order, and identify which is being placed in a given situation.
19. Identify the purpose of the Dow Jones Industrial Average and stock indexes such as the S&P 500.
20. Evaluate selected financial information concerning two or three companies, choose which company appears to be the best investment, and justify your choice.
21. Contrast full-service, discount, and online brokers and recommend the type of investor for which each would be suited.
22. Write a one-half page report on the question, "Is investing in stocks gambling?", citing specific scriptures to justify your view.

1. Distinguish between stocks and bonds.
2. Explain why bond prices and interest rates are inversely related, and determine when a bond will sell at a (1) discount, (2) premium.
3. Compare the return on bonds with a call feature and those without a call feature.
4. Identify the relationship between the bond rating assigned to a bond and the interest rate paid on a bond, and from a list of bond ratings, choose the one which is the highest.
5. Identify the right given to holders of convertible bonds.
6. Contrast Treasury bonds, municipal bonds, and corporate bonds as to (a) risk and (b) return.
7. Interpret bond price quotations.
8. Compute the current yield and the approximate yield to maturity on a bond.
9. Identify why municipal bonds are attractive for an individual in a high tax bracket.

1. Identify the best description of how a mutual fund works.
2. Distinguish between load and no-load mutual funds.
3. Identify advantages of investing in mutual funds.
4. Discuss five important factors to consider in selecting mutual funds.
5. Choose which of two mutual funds appears to be better and justify your choice.
6. Recommend the most appropriate type of mutual fund (growth, capital appreciation, index, etc.) for an investor, given information concerning his (her) objective.
7. Explain the significance of net asset value.
8. Calculate using the approximate yield formula the rate of return earned on a mutual fund investment.
9. Identify printed sources to consult for information on mutual funds.
10. Identify a website which provides free information which would be helpful in choosing a mutual fund.

Objectives, Asset Allocation (Chapter 18)

1. Identify what is meant by asset allocation.

2. Identify methods of reducing the risk in a portfolio, and indicate which of the methods is being used in a specified situation.

3. Given the composition of a portfolio and information about the investor who owns the portfolio, determine whether the portfolio is

(a)    well diversified, 

(b)    appropriate considering the age of the investor,

(c)    appropriate considering the risk tolerance of the investor,

(d)    appropriate considering expected economic conditions.

4. Identify the meaning of correlation, high positive correlation, and high negative correlation.

5. Determine the effect on portfolio risk of adding an investment to your portfolio that has (a) high positive correlation with your current investments and/or (b) no correlation or high negative correlation with your current investments.

6. Determine how adding a particular type of investment to a portfolio is likely to affect the portfolio's overall (a) risk and/or (b) return.

7. Explain how a REIT (real estate investment trust) differs from equity and bond mutual funds.