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. -[Bond | Common stock] prices would be most affected by interest rate risk.

(Essay)

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Question 41

If you buy a zero coupon bond,you will receive no cash from the corporation until the bond matures.

(True/False)

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Question 42

A premium bond sells at par value.

(True/False)

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Question 43

Which of the following types of bonds are unsecured?

(Multiple Choice)

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Question 44

Positive aspects about bonds do not include

(Multiple Choice)

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Question 45

Companies whose earnings have increased at an above-average level over the recent past are called

(Multiple Choice)

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Question 46

A bond selling below par value is selling at

(Multiple Choice)

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Question 47

Stocks with high betas will have larger price gains but lower price declines than those with low betas.

(True/False)

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Question 48

John and Mary Smith own 500 shares of ABE stock.After the company pays a 6 percent stock dividend,John and Mary will own 530 shares of ABE stock.

(True/False)

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Question 49

Treasury notes,bills,and bonds represent loans to the federal government.

(True/False)

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Question 50

When cash dividends on stock are paid,but the stockholder has these dividends automatically reinvested,what are the federal income tax implications?

(Multiple Choice)

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Question 51

Typically the best time to invest in the stock market is when the market is very volatile.

(True/False)

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Question 52

A bond with a yield to maturity that equaled or exceeded an investor's desired rate of return is considered an attractive investment.

(True/False)

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Question 53

At the time you buy a convertible bond,you will know the number of stock shares for which it can be exchanged.

(True/False)

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Question 54

The value of a stock at any time is a function of future returns rather than of past performance.

(True/False)

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Question 55

A callable bond allows the issuer contact the bond issuer at any time.

(True/False)

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Question 56

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. -By holding stock in 5 companies,you are reducing [market | business] risk.

(Essay)

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(81)

Question 57

Capital appreciation of an investment is a form of Current Income.

(True/False)

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Question 58

Recovery of principal and capital gain are elements of total return.

(True/False)

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Question 59

Anderson,Inc.has $10 million liabilities,$12 million preferred stock,8 million shares of common stock outstanding,and $45 million in total assets.The book value is

(Multiple Choice)

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Question 60

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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. -[Bond | Common stock] prices would be most affected by interest rate risk.

If you buy a zero coupon bond,you will receive no cash from the corporation until the bond matures.

A premium bond sells at par value.

Which of the following types of bonds are unsecured?

Positive aspects about bonds do not include

Companies whose earnings have increased at an above-average level over the recent past are called

A bond selling below par value is selling at

Stocks with high betas will have larger price gains but lower price declines than those with low betas.

John and Mary Smith own 500 shares of ABE stock.After the company pays a 6 percent stock dividend,John and Mary will own 530 shares of ABE stock.

Treasury notes,bills,and bonds represent loans to the federal government.

When cash dividends on stock are paid,but the stockholder has these dividends automatically reinvested,what are the federal income tax implications?

Typically the best time to invest in the stock market is when the market is very volatile.

A bond with a yield to maturity that equaled or exceeded an investor's desired rate of return is considered an attractive investment.

At the time you buy a convertible bond,you will know the number of stock shares for which it can be exchanged.

The value of a stock at any time is a function of future returns rather than of past performance.

A callable bond allows the issuer contact the bond issuer at any time.

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. -By holding stock in 5 companies,you are reducing [market | business] risk.

Capital appreciation of an investment is a form of Current Income.

Recovery of principal and capital gain are elements of total return.

Anderson,Inc.has $10 million liabilities,$12 million preferred stock,8 million shares of common stock outstanding,and $45 million in total assets.The book value is

Understanding the Financial Planning Process

Your Financial Statements and Plans

Preparing Your Taxes

Managing Your Cash and Savings

Making Automobile and Housing Decisions

Using Credit

Using Consumer Loans

Insuring Your Life

Insuring Your Health

Protecting Your Property

Investment Planning

Investing in Mutual Funds

Planning for Retirement

Preserving Your Estate

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