Which of the Following Is Not True About Institutional Investors

question 48

Multiple Choice

Which of the following is not true about institutional investors?

• A) Institutions invest the funds of individuals by purchasing shares of stock in corporations.
• B) The proportion of institutional ownership of stock in the U.S. has declined slowly since the 1960s.
• C) Through institutions over one-half of the U.S. population has an indirect ownership in corporations.
• D) Institutions accounted for 62 percent of the value of all equities owned in the U.S. in 2005.

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Definitions:

Expiration

The end of the life of a financial instrument or contract, after which it must either be settled by delivery of the underlying assets or closed.

Dividend Paying

A characteristic of companies that regularly distribute a portion of their profits to shareholders.

Strike Call

A term that is likely confused with "call option," which is a financial contract giving the buyer the right, but not the obligation, to buy a stock or other asset at a predetermined price (the strike price) within a specific time frame.

Interest Rate

The fee, in the form of a percentage of the principal, that a lender requires from a borrower for the usage of assets.