Question 1

Bondholders will receive interest payments after the stockholders receive dividends.

Accepted Answer

A) True 
 B)False

Question 2

Which of the following is an advantage of owning growth stocks?

Accepted Answer

A)  High and growing dividends 
B)  High but declining dividends 
C)  Low PE ratio 
D)  High potential for capital growth 
E)  Tend to be solid blue chip stocks 
A)  High and growing dividends 
B)  High but declining dividends 
C)  Low PE ratio 
D)  High potential for capital growth 
E)  Tend to be solid blue chip stocks

Question 3

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.
-You are looking for a guaranteed steady stream of income;you should invest in [stocks | bonds].

Accepted Answer

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

Question 4

Bonds are issued by

Accepted Answer

A)  corporations,state and local and federal governments. 
B)  state and local governments and partnerships. 
C)  corporations and partnerships. 
D)  Moodys and Standard and Poor's. 
E)  none of these. 
A)  corporations,state and local and federal governments. 
B)  state and local governments and partnerships. 
C)  corporations and partnerships. 
D)  Moodys and Standard and Poor's. 
E)  none of these.

Question 5

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.
-ACE,Inc.has a market capitalization of $500 million.It would be classified as a [small-cap | mid-cap].

Accepted Answer

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

Question 6

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.
-Annual interest income divided by market price of the bond equals [current yield | yield to maturity].

Accepted Answer

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

Question 7

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 stock market as a whole has a beta of [+1.0 | -1.0].

Accepted Answer

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

Question 8

The callable feature of a bond protects the issuer when current rates are falling.

Accepted Answer

A) True 
 B)False

Question 9

Which of the following statements about preferred stock is true?

Accepted Answer

A)  Preferred shareholders generally get enhanced voting rights. 
B)  Dividends must generally be paid to preferred shareholders before dividends may be paid to common shareholders. 
C)  Preferred stocks are a hybrid between equity and debt,because like common stock the owners of preferred shares can vote and like debt they are paid interest. 
D)  It would be foolish to purchase the common stock of a company that also issues preferred shares,because the preferred shares have a higher yield with a stronger guarantee. 
E)  None of the above are true. 
A)  Preferred shareholders generally get enhanced voting rights. 
B)  Dividends must generally be paid to preferred shareholders before dividends may be paid to common shareholders. 
C)  Preferred stocks are a hybrid between equity and debt,because like common stock the owners of preferred shares can vote and like debt they are paid interest. 
D)  It would be foolish to purchase the common stock of a company that also issues preferred shares,because the preferred shares have a higher yield with a stronger guarantee. 
E)  None of the above are true.

Question 10

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.
-A growth stock would be expected to pay a [high | low] level of dividends.

Accepted Answer

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

Question 11

The approximate yield to maturity when the average income is $3.00,the average capital gain is $6.00,the average investment is $27.00,and the investment is held for 3 years is

Accepted Answer

A)  11 percent. 
B)  33 percent. 
C)  27 percent. 
D)  21 percent. 
E)  50 percent. 
A)  11 percent. 
B)  33 percent. 
C)  27 percent. 
D)  21 percent. 
E)  50 percent.

Question 12

Equipment trust certificates are a type of ____ bond.

Accepted Answer

A)  treasury 
B)  corporate 
C)  municipal 
D)  agency 
E)  none of these. 
A)  treasury 
B)  corporate 
C)  municipal 
D)  agency 
E)  none of these.

Question 13

Bonds issued by subdivisions of the U.S.government but not guaranteed by the government are called

Accepted Answer

A)  federal bonds. 
B)  agency bonds. 
C)  treasury bonds. 
D)  municipal bonds. 
E)  trust bonds. 
A)  federal bonds. 
B)  agency bonds. 
C)  treasury bonds. 
D)  municipal bonds. 
E)  trust bonds.

Question 14

The risk free rate of return is often measured by the return on US Treasury Bills.

Accepted Answer

A) True 
 B)False

Question 15

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.
-Most publicly traded stocks represent [a liquid | an illiquid] investment.

Accepted Answer

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

Question 16

Calculate the dividend yield on OPQ stock.Earnings per share are $2.75 and the quarterly dividend is 25 cents.The book value is $15.20 per share while the market value is $25.00.(Show all work. )

Accepted Answer

Dividend y

Question 17

An investor who wants to preserve capital should purchase bonds with at least 10 years to maturity.

Accepted Answer

A) True 
 B)False

Question 18

Calculate the earnings per share of a company with the following information? (Show all work. )

Accepted Answer

The answer of Calculate the earnings per share of a...

Question 19

TIPS are appropriate investors who are conservative and concerned about inflation.

Accepted Answer

A) True 
 B)False

Question 20

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.
-One should look for companies with steadily [increasing | decreasing] book value per share.

Accepted Answer

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

Bondholders will receive interest payments after the stockholders receive dividends.

Which of the following is an advantage of owning 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. -You are looking for a guaranteed steady stream of income;you should invest in [stocks | bonds].

Bonds are issued by

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 stock market as a whole has a beta of [+1.0 | -1.0].

The callable feature of a bond protects the issuer when current rates are falling.

Which of the following statements about preferred stock is true?

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. -A growth stock would be expected to pay a [high | low] level of dividends.

The approximate yield to maturity when the average income is $3.00,the average capital gain is $6.00,the average investment is $27.00,and the investment is held for 3 years is

Equipment trust certificates are a type of ____ bond.

Bonds issued by subdivisions of the U.S.government but not guaranteed by the government are called

The risk free rate of return is often measured by the return on US Treasury Bills.

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. -Most publicly traded stocks represent [a liquid | an illiquid] investment.

Calculate the dividend yield on OPQ stock.Earnings per share are $2.75 and the quarterly dividend is 25 cents.The book value is $15.20 per share while the market value is $25.00.(Show all work. )

An investor who wants to preserve capital should purchase bonds with at least 10 years to maturity.

Calculate the earnings per share of a company with the following information? (Show all work. )

TIPS are appropriate investors who are conservative and concerned about inflation.

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. -One should look for companies with steadily [increasing | decreasing] book value per share.

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

Bondholders will receive interest payments after the stockholders receive dividends.

Which of the following is an advantage of owning 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. -You are looking for a guaranteed steady stream of income;you should invest in [stocks | bonds].

Bonds are issued by

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 stock market as a whole has a beta of [+1.0 | -1.0].

The callable feature of a bond protects the issuer when current rates are falling.

Which of the following statements about preferred stock is true?

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. -A growth stock would be expected to pay a [high | low] level of dividends.

The approximate yield to maturity when the average income is $3.00,the average capital gain is $6.00,the average investment is $27.00,and the investment is held for 3 years is

Equipment trust certificates are a type of ____ bond.

Bonds issued by subdivisions of the U.S.government but not guaranteed by the government are called

The risk free rate of return is often measured by the return on US Treasury Bills.

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. -Most publicly traded stocks represent [a liquid | an illiquid] investment.

Calculate the dividend yield on OPQ stock.Earnings per share are $2.75 and the quarterly dividend is 25 cents.The book value is $15.20 per share while the market value is $25.00.(Show all work. )

An investor who wants to preserve capital should purchase bonds with at least 10 years to maturity.

Calculate the earnings per share of a company with the following information? (Show all work. )

TIPS are appropriate investors who are conservative and concerned about inflation.

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. -One should look for companies with steadily [increasing | decreasing] book value per share.

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