Question 1

An asset traded in secondary markets has a low market risk.

Accepted Answer

A) True 
 B)False

Question 2

In which of the following type of investment is the most liquidity risk?

Accepted Answer

A)  Common stock 
B)  Corporate bonds 
C)  Treasury bonds 
D)  Land 
E)  Mutual fund shares 
A)  Common stock 
B)  Corporate bonds 
C)  Treasury bonds 
D)  Land 
E)  Mutual fund shares

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.
-Dividends and earnings per share [refer | do not refer] to the same thing.

Accepted Answer

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

Question 4

A bond with a S&P rating of BBB is considered investment-grade.

Accepted Answer

A) True 
 B)False

Question 5

Stock profitability is often measured by

Accepted Answer

A)  book value. 
B)  return on equity. 
C)  market value. 
D)  net profit margin. 
E)  beta. 
A)  book value. 
B)  return on equity. 
C)  market value. 
D)  net profit margin. 
E)  beta.

Question 6

Changes in the value of securities due to social,political,or economic factors are referred to as market risk.

Accepted Answer

A) True 
 B)False

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.
-A potential high return on an investment will signal a [high | low] risk exposure.

Accepted Answer

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

Question 8

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.
-Treasury securities are yielding 6%.A growth stock with an expected return of 8% [would | would not] be considered a viable investment candidate by most investors.

Accepted Answer

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

Question 9

When interest rates rise,bond prices will

Accepted Answer

A)  return to a steady price. 
B)  rise. 
C)  fall. 
D)  vary unpredictably. 
E)  not be affected. 
A)  return to a steady price. 
B)  rise. 
C)  fall. 
D)  vary unpredictably. 
E)  not be affected.

Question 10

Bonds provide for investment return primarily in the form of growth.

Accepted Answer

A) True 
 B)False

Question 11

An investment is acceptable if the expected rate of return is greater than the desired rate of return.

Accepted Answer

A) True 
 B)False

Question 12

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 best way to invest in foreign stocks is to buy [them directly on the foreign exchanges | ADR's].

Accepted Answer

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

Question 13

A high inflation rate would result in a high degree of

Accepted Answer

A)  business risk. 
B)  financial risk. 
C)  market risk. 
D)  purchasing power risk. 
E)  interest rate risk. 
A)  business risk. 
B)  financial risk. 
C)  market risk. 
D)  purchasing power risk. 
E)  interest rate risk.

Question 14

Most companies pay their stockholders cash dividends on a semi-annual basis.

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.
-The dividend on a preferred stock has been missed.In order to receive this money later,your stock has to be [cumulative | noncumulative].

Accepted Answer

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

Question 16

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.
-Stock dividends are usually paid [monthly | annually].

Accepted Answer

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

Question 17

Advantages of a dividend reinvestment plan can include

Accepted Answer

A)  stock sold at a discount. 
B)  guaranteed rate of return. 
C)  tax advantages. 
D)  a and c 
E)  a,b,and c 
A)  stock sold at a discount. 
B)  guaranteed rate of return. 
C)  tax advantages. 
D)  a and c 
E)  a,b,and c

Question 18

A bond may sell

Accepted Answer

A)  at par value. 
B)  below par value. 
C)  above par value. 
D)  none of these. 
E)  any of these. 
A)  at par value. 
B)  below par value. 
C)  above par value. 
D)  none of these. 
E)  any of these.

Question 19

A company has a beta of 1.0;if the market goes down by 8%,the value of the company's stock will

Accepted Answer

A)  increase 8%. 
B)  decline 8%. 
C)  increase 1%. 
D)  decline 1%. 
E)  none of these. 
A)  increase 8%. 
B)  decline 8%. 
C)  increase 1%. 
D)  decline 1%. 
E)  none of these.

Question 20

Common stocks pay a guaranteed dividend each year.

Accepted Answer

A) True 
 B)False

An asset traded in secondary markets has a low market risk.

In which of the following type of investment is the most liquidity risk?

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. -Dividends and earnings per share [refer | do not refer] to the same thing.

A bond with a S&P rating of BBB is considered investment-grade.

Stock profitability is often measured by

Changes in the value of securities due to social,political,or economic factors are referred to as market risk.

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 potential high return on an investment will signal a [high | low] risk exposure.

When interest rates rise,bond prices will

Bonds provide for investment return primarily in the form of growth.

An investment is acceptable if the expected rate of return is greater than the desired rate of return.

A high inflation rate would result in a high degree of

Most companies pay their stockholders cash dividends on a semi-annual basis.

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. -Stock dividends are usually paid [monthly | annually].

Advantages of a dividend reinvestment plan can include

A bond may sell

A company has a beta of 1.0;if the market goes down by 8%,the value of the company's stock will

Common stocks pay a guaranteed dividend each year.

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

An asset traded in secondary markets has a low market risk.

In which of the following type of investment is the most liquidity risk?

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. -Dividends and earnings per share [refer | do not refer] to the same thing.

A bond with a S&P rating of BBB is considered investment-grade.

Stock profitability is often measured by

Changes in the value of securities due to social,political,or economic factors are referred to as market risk.

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 potential high return on an investment will signal a [high | low] risk exposure.

When interest rates rise,bond prices will

Bonds provide for investment return primarily in the form of growth.

An investment is acceptable if the expected rate of return is greater than the desired rate of return.

A high inflation rate would result in a high degree of

Most companies pay their stockholders cash dividends on a semi-annual basis.

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. -Stock dividends are usually paid [monthly | annually].

Advantages of a dividend reinvestment plan can include

A bond may sell

A company has a beta of 1.0;if the market goes down by 8%,the value of the company's stock will

Common stocks pay a guaranteed dividend each year.

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