Test bank Investment Vehicles Test - Part 2 complete questions and
correct verified answers
1. Foreign Exchange Market: an over-the-counter global marketplace that determines the exchange rate
for currencies around the world.
2. Direct Exchange Rate: specifies the value of the currency in U.S. dollars.For example, the Mexican peso
may have a value of $.10
3. Indirect Exchange Rate: specifies the value of the currency as the number of that currency equal to a U.S.
dollar. For example: 98 Yen per dollar
4. cross exchange rate: amount of one foreign currency per unit of another foreign currency
5. House Flipping: refers to the practice of buying a house for below-market value and selling the house at or
above-market value
6. rental property: housing or commercial property that is rented out to others
7. Commodities: a raw material or primary agricultural product that can be bought and sold, such as copper or
cottee.
8. Types of commodities: agriculture, energy, and metals
9. futures contract: an agreement to buy or sell at a specific date in the future at a predetermined price
10. Options Contract: Gives an investor the right to buy (or sell) shares at a specific price at any time, as long
as the contract is in ettect.
11. intrinsic value of an option: The amount the option is "in the money"
12. Parity: When the intrinsic value is equal to the premium
13. Call Option: gives the holder the right to buy an asset by a certain date for a certain price
14. Put Option: gives the holder the right to sell an asset at a specified exercise price on or before a specified
expiration date
15. Long Position: When an investor owns, or has the right to own, an asset
16. Short Position: The writer of the Options Contract
17. out of the money: Describes an option that if exercised immediately results in a loss of money.
18. in the money: Describes an option that if exercised results in a gain of money.
19. How to make money trading currencies: Buy Low - Sell High
20. Advantages of Investing in Collectibles: ’Diversification
’Portability
’Follow your passion
’Fun
’Easy access
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correct verified answers
1. Foreign Exchange Market: an over-the-counter global marketplace that determines the exchange rate
for currencies around the world.
2. Direct Exchange Rate: specifies the value of the currency in U.S. dollars.For example, the Mexican peso
may have a value of $.10
3. Indirect Exchange Rate: specifies the value of the currency as the number of that currency equal to a U.S.
dollar. For example: 98 Yen per dollar
4. cross exchange rate: amount of one foreign currency per unit of another foreign currency
5. House Flipping: refers to the practice of buying a house for below-market value and selling the house at or
above-market value
6. rental property: housing or commercial property that is rented out to others
7. Commodities: a raw material or primary agricultural product that can be bought and sold, such as copper or
cottee.
8. Types of commodities: agriculture, energy, and metals
9. futures contract: an agreement to buy or sell at a specific date in the future at a predetermined price
10. Options Contract: Gives an investor the right to buy (or sell) shares at a specific price at any time, as long
as the contract is in ettect.
11. intrinsic value of an option: The amount the option is "in the money"
12. Parity: When the intrinsic value is equal to the premium
13. Call Option: gives the holder the right to buy an asset by a certain date for a certain price
14. Put Option: gives the holder the right to sell an asset at a specified exercise price on or before a specified
expiration date
15. Long Position: When an investor owns, or has the right to own, an asset
16. Short Position: The writer of the Options Contract
17. out of the money: Describes an option that if exercised immediately results in a loss of money.
18. in the money: Describes an option that if exercised results in a gain of money.
19. How to make money trading currencies: Buy Low - Sell High
20. Advantages of Investing in Collectibles: ’Diversification
’Portability
’Follow your passion
’Fun
’Easy access
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