Question 1

You received a stock dividend this year instead of cash.This is taxable income.

Accepted Answer

A) True 
 B)False

Question 2

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.
-[Market | Business] risk results from the behavior of investors that may cause security prices to fluctuate.

Accepted Answer

The answer of INSTRUCTIONS: Choose the word or phrase in...

Question 3

Purchasing power risk is of most concern during economic recession.

Accepted Answer

A) True 
 B)False

Question 4

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.
-The lower a stock's beta,the [less | more] volatile you can expect its price fluctuations to be.

Accepted Answer

The answer of INSTRUCTIONS: Choose the word or phrase in...

Question 5

____ risk results from the behavior of investors in the securities market

Accepted Answer

A)  Business 
B)  Financial 
C)  Market 
D)  Purchasing power 
E)  Interest rate 
A)  Business 
B)  Financial 
C)  Market 
D)  Purchasing power 
E)  Interest rate

Question 6

A company with low financial risk has little to no long-term debt.

Accepted Answer

A) True 
 B)False

Question 7

Real estate is generally a less liquid investment than common stock.

Accepted Answer

A) True 
 B)False

Question 8

Corporate ownership is evidenced by

Accepted Answer

A)  preferred stock. 
B)  common stock. 
C)  bonds. 
D)  capital gain. 
E)  property rights. 
A)  preferred stock. 
B)  common stock. 
C)  bonds. 
D)  capital gain. 
E)  property rights.

Question 9

Income stocks are similar to bonds in that they pay annual interest to owners.

Accepted Answer

A) True 
 B)False

Question 10

The returns you would expect from your investments could be

Accepted Answer

A)  risk. 
B)  capital gains. 
C)  current income. 
D)  a and c above. 
E)  b and c above. 
A)  risk. 
B)  capital gains. 
C)  current income. 
D)  a and c above. 
E)  b and c above.

Question 11

An investor is guaranteed to make a positive return on Treasury notes and bonds.

Accepted Answer

A) True 
 B)False

Question 12

Your convertible bond has a conversion ratio of 15 shares.Current market price of the common stock is $50/share.The conversion value of this bond is

Accepted Answer

A)  $150. 
B)  $500. 
C)  $650. 
D)  $750. 
E)  $900. 
A)  $150. 
B)  $500. 
C)  $650. 
D)  $750. 
E)  $900.

Question 13

Only the federal government issues zero coupon bonds.

Accepted Answer

A) True 
 B)False

Question 14

Preferred stock can be exchanged for common stock.

Accepted Answer

A) True 
 B)False

Question 15

Suppose the EPS of Wal-Mart stock was $2 and the current price per earnings ratio is 10.What is the current price of Wal-Mart stock?

Accepted Answer

A)  $5 
B)  $8 
C)  $20 
D)  $40 
E)  Can not compute with given information 
A)  $5 
B)  $8 
C)  $20 
D)  $40 
E)  Can not compute with given information

Question 16

The approximate yield-to-maturity of a bond is greater than the stated rate of interest when

Accepted Answer

A)  purchased at face value. 
B)  purchased at discount. 
C)  purchased at premium. 
D)  market rates of interest decline. 
E)  market rates of interest are constant. 
A)  purchased at face value. 
B)  purchased at discount. 
C)  purchased at premium. 
D)  market rates of interest decline. 
E)  market rates of interest are constant.

Question 17

Low price/earnings ratios indicate limited or low investor confidence.

Accepted Answer

A) True 
 B)False

Question 18

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.
-Past returns on an investment are [an indication | a guarantee] of future returns.

Accepted Answer

The answer of INSTRUCTIONS: Choose the word or phrase in...

Question 19

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.
-Long term [low | high] bond interest payments are subject to purchasing power risk.

Accepted Answer

The answer of INSTRUCTIONS: Choose the word or phrase in...

Question 20

A stocks beta is an indication of its relationship to the general market.

Accepted Answer

A) True 
 B)False

You received a stock dividend this year instead of cash.This is taxable income.

Purchasing power risk is of most concern during economic recession.

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. -The lower a stock's beta,the [less | more] volatile you can expect its price fluctuations to be.

____ risk results from the behavior of investors in the securities market

A company with low financial risk has little to no long-term debt.

Real estate is generally a less liquid investment than common stock.

Corporate ownership is evidenced by

Income stocks are similar to bonds in that they pay annual interest to owners.

The returns you would expect from your investments could be

An investor is guaranteed to make a positive return on Treasury notes and bonds.

Your convertible bond has a conversion ratio of 15 shares.Current market price of the common stock is $50/share.The conversion value of this bond is

Only the federal government issues zero coupon bonds.

Preferred stock can be exchanged for common stock.

Suppose the EPS of Wal-Mart stock was $2 and the current price per earnings ratio is 10.What is the current price of Wal-Mart stock?

The approximate yield-to-maturity of a bond is greater than the stated rate of interest when

Low price/earnings ratios indicate limited or low investor confidence.

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. -Past returns on an investment are [an indication | a guarantee] of future returns.

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. -Long term [low | high] bond interest payments are subject to purchasing power risk.

A stocks beta is an indication of its relationship to the general market.

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

Filters

Exam 12: Investing in Stocks and Bonds

You received a stock dividend this year instead of cash.This is taxable income.

Purchasing power risk is of most concern during economic recession.

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. -The lower a stock's beta,the [less | more] volatile you can expect its price fluctuations to be.

____ risk results from the behavior of investors in the securities market

A company with low financial risk has little to no long-term debt.

Real estate is generally a less liquid investment than common stock.

Corporate ownership is evidenced by

Income stocks are similar to bonds in that they pay annual interest to owners.

The returns you would expect from your investments could be

An investor is guaranteed to make a positive return on Treasury notes and bonds.

Your convertible bond has a conversion ratio of 15 shares.Current market price of the common stock is $50/share.The conversion value of this bond is

Only the federal government issues zero coupon bonds.

Preferred stock can be exchanged for common stock.

Suppose the EPS of Wal-Mart stock was $2 and the current price per earnings ratio is 10.What is the current price of Wal-Mart stock?

The approximate yield-to-maturity of a bond is greater than the stated rate of interest when

Low price/earnings ratios indicate limited or low investor confidence.

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. -Past returns on an investment are [an indication | a guarantee] of future returns.

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. -Long term [low | high] bond interest payments are subject to purchasing power risk.

A stocks beta is an indication of its relationship to the general market.

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

Filters