Exam 12: Investing in Stocks and Bonds

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement.Select A for the first item,B for the second item,and C if neither item will correctly complete the statement. -More conservation investors would prefer stocks with [higher | lower] betas.

Dividend reinvestment plans should be avoided because of their relatively high cost.

Bond prices are impacted by both the direction and magnitude of interest rate changes.

Common stockholders are considered to be the residual owners of the company.

Interest rate risk is greater for long-term bonds than for short-term bonds.

The minimum rate of return you would like to receive in compensation for the amount of risk you have assumed is the

Zero-coupon bonds are issued by

Interest rate risk is greater for stocks than for bonds.

Based upon this information: What year will the bond reach maturity?

U-Need-This has $12 million liabilities,$12 million preferred stock,10 million shares of common stock outstanding,and $39 million in total assets.The book value is

Total investment return can be approximated using the current yield.

In the late 1990's,common stock prices for technology stocks fell dramatically.

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement.Select A for the first item,B for the second item,and C if neither item will correctly complete the statement. -Tech stocks are nearly always [speculative | growth] stocks.

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement.Select A for the first item,B for the second item,and C if neither item will correctly complete the statement. -Common stockholders usually receive one vote per [person | share].

Stocks whose price movements who tend to follow the business cycle are called

Convertible preferred stock can be exchanged for common stock.

You received a cash dividend from your stock investment this year.This is taxable income.

A characteristic of defensive stocks is

An example of event risk would be

Tech stocks represent stocks in the technology and utility sectors.