Question 1

How is the market value of a stock determined?

Accepted Answer

A)  Interest rates 
B)  The firm's owners' equity 
C)  Number of shares available 
D)  Profit-seeking potential 
E)  How much buyers are willing to pay 
A)  Interest rates 
B)  The firm's owners' equity 
C)  Number of shares available 
D)  Profit-seeking potential 
E)  How much buyers are willing to pay

Question 2

What is the term for a division of stock that gives stockholders a greater number of shares but does not change each individual's proportionate share of ownership?

Accepted Answer

A)  Stock dividend 
B)  Stock split 
C)  Stock yield 
D)  Stock warrant 
E)  Stock exchange 
A)  Stock dividend 
B)  Stock split 
C)  Stock yield 
D)  Stock warrant 
E)  Stock exchange

Question 3

Which of the following is the federal government agency that regulates U.S. securities markets?

Accepted Answer

A)  New York Stock Exchange 
B)  Federal Reserve 
C)  Commerce Department 
D)  Securities and Exchange Commission 
E)  Treasury Department 
A)  New York Stock Exchange 
B)  Federal Reserve 
C)  Commerce Department 
D)  Securities and Exchange Commission 
E)  Treasury Department

Question 4

Which of the following is an organization of individuals coordinated to provide an institutional setting in which stock can be bought and sold?

Accepted Answer

A)  Stock exchange 
B)  Brokerage 
C)  Server 
D)  Over-the-counter market 
E)  Mutual fund 
A)  Stock exchange 
B)  Brokerage 
C)  Server 
D)  Over-the-counter market 
E)  Mutual fund

Question 5

What is determined when the value of outstanding shares is multiplied by the number of outstanding shares?

Accepted Answer

A)  Market capitalization 
B)  Stock split value 
C)  Earnings per dollar of investment 
D)  Dividend value 
E)  Earnings per share 
A)  Market capitalization 
B)  Stock split value 
C)  Earnings per dollar of investment 
D)  Dividend value 
E)  Earnings per share

Question 6

What is the advantage of exchange-traded funds (EFTs)over mutual funds?

Accepted Answer

A)  They can be traded throughout the day like a stock. 
B)  The cost of the fund management is passed on to the holder. 
C)  They do not require the services of a broker to complete a transaction. 
D)  They allow for frequent trading with lower overall transaction fees. 
E)  They regularly out-perform mutual funds. 
A)  They can be traded throughout the day like a stock. 
B)  The cost of the fund management is passed on to the holder. 
C)  They do not require the services of a broker to complete a transaction. 
D)  They allow for frequent trading with lower overall transaction fees. 
E)  They regularly out-perform mutual funds.

Question 7

Explain what exchange-traded funds are and how they are tracked.

Accepted Answer

As with an index mutual fund, an exchang

Question 8

To avoid paying a commission on an investment, what type of fund might an investor choose?

Accepted Answer

A)  Blue-chip stock 
B)  Mutual funds 
C)  No-load funds 
D)  Common stock 
E)  Load funds 
A)  Blue-chip stock 
B)  Mutual funds 
C)  No-load funds 
D)  Common stock 
E)  Load funds

Question 9

The use of special knowledge about a firm, which results in an unfair advantage or generates profit or other types of gain, is known as what?

Accepted Answer

A)  Equity financing 
B)  Market capitalization 
C)  Insider trading 
D)  Prospectus information 
E)  FINRA violation 
A)  Equity financing 
B)  Market capitalization 
C)  Insider trading 
D)  Prospectus information 
E)  FINRA violation

Question 10

Which of the following is indicative of a bull market?

Accepted Answer

A)  Stock prices that are averaging 20 percent off peak 
B)  Rising stock prices for 12 months or more 
C)  Falling stock prices for 6 months or more 
D)  A spike in the value of the Dow Jones Industrial Average 
E)  Investors who are motivated to sell stocks based on current value 
A)  Stock prices that are averaging 20 percent off peak 
B)  Rising stock prices for 12 months or more 
C)  Falling stock prices for 6 months or more 
D)  A spike in the value of the Dow Jones Industrial Average 
E)  Investors who are motivated to sell stocks based on current value

Question 11

The largest stock exchange in the world is the Tokyo exchange.

Accepted Answer

A) True 
 B)False

Question 12

Investments such as money market mutual funds offer what advantage to investors?

Accepted Answer

A)  Conservative capital growth 
B)  Long-term capital growth 
C)  Market appreciation 
D)  Aggressive growth 
E)  Safety and stability 
A)  Conservative capital growth 
B)  Long-term capital growth 
C)  Market appreciation 
D)  Aggressive growth 
E)  Safety and stability

Question 13

Because of the uncertainties involved in stock prices, investment professionals believe day-to-day prices to be a generally poor indicator of any stock's real value.

Accepted Answer

A) True 
 B)False

Question 14

When issuing shares of stock, what is being given to stock holders in exchange for their investment in the organization?

Accepted Answer

A)  Dividends 
B)  Voting rights 
C)  Increased par value 
D)  Tax advantages 
E)  Long-term growth on investments 
A)  Dividends 
B)  Voting rights 
C)  Increased par value 
D)  Tax advantages 
E)  Long-term growth on investments

Question 15

Aggressive growth funds are designed for investors who can accept the risk of loss inherent in common stock investing with severe price fluctuations, but also the potential for superior returns over time.

Accepted Answer

A) True 
 B)False

Question 16

For investors who do not want investment advice and wish to avoid paying a commission, what is the best type of broker assistance firm?

Accepted Answer

A)  Mutual fund advisors 
B)  Investment banks 
C)  Stock broker 
D)  Discount broker 
E)  Full service broker 
A)  Mutual fund advisors 
B)  Investment banks 
C)  Stock broker 
D)  Discount broker 
E)  Full service broker

Question 17

When a new bond is issued, when does the bond's par value have to be repaid?

Accepted Answer

A)  When the company files for bankruptcy 
B)  Before the company goes into default 
C)  On the maturity date 
D)  On the issue date 
E)  When the company makes enough profit to cover the value of the bond 
A)  When the company files for bankruptcy 
B)  Before the company goes into default 
C)  On the maturity date 
D)  On the issue date 
E)  When the company makes enough profit to cover the value of the bond

Question 18

More Americans are investing in the stock market through online trading. Explain the value of online trading.

Accepted Answer

The popularity of online trading stems f

Question 19

Why should an investor consider diversification and asset allocation?

Accepted Answer

A)  To offset capital gains 
B)  To achieve desired risk-return balance 
C)  To increase total returns 
D)  To achieve higher dividend yields 
E)  To improve price-appreciation values 
A)  To offset capital gains 
B)  To achieve desired risk-return balance 
C)  To increase total returns 
D)  To achieve higher dividend yields 
E)  To improve price-appreciation values

Question 20

Which of the following is the name for a portion of the ownership of a corporation?

Accepted Answer

A)  Schedule C 
B)  Stock 
C)  Partnership 
D)  LLC 
E)  Dividend 
A)  Schedule C 
B)  Stock 
C)  Partnership 
D)  LLC 
E)  Dividend

How is the market value of a stock determined?

What is the term for a division of stock that gives stockholders a greater number of shares but does not change each individual's proportionate share of ownership?

Which of the following is the federal government agency that regulates U.S. securities markets?

Which of the following is an organization of individuals coordinated to provide an institutional setting in which stock can be bought and sold?

What is determined when the value of outstanding shares is multiplied by the number of outstanding shares?

What is the advantage of exchange-traded funds (EFTs)over mutual funds?

Explain what exchange-traded funds are and how they are tracked.

To avoid paying a commission on an investment, what type of fund might an investor choose?

The use of special knowledge about a firm, which results in an unfair advantage or generates profit or other types of gain, is known as what?

Which of the following is indicative of a bull market?

The largest stock exchange in the world is the Tokyo exchange.

Investments such as money market mutual funds offer what advantage to investors?

Because of the uncertainties involved in stock prices, investment professionals believe day-to-day prices to be a generally poor indicator of any stock's real value.

When issuing shares of stock, what is being given to stock holders in exchange for their investment in the organization?

Aggressive growth funds are designed for investors who can accept the risk of loss inherent in common stock investing with severe price fluctuations, but also the potential for superior returns over time.

For investors who do not want investment advice and wish to avoid paying a commission, what is the best type of broker assistance firm?

When a new bond is issued, when does the bond's par value have to be repaid?

More Americans are investing in the stock market through online trading. Explain the value of online trading.

Why should an investor consider diversification and asset allocation?

Which of the following is the name for a portion of the ownership of a corporation?

The U.S. Business Environment

Understanding Business Ethics and Social Responsibility

Entrepreneurship, New Ventures, and Business Ownership

Understanding the Global Context of Business

Managing the Business

Organizing the Business

Operations Management and Quality

Employee Behavior and Motivation

Leadership and Decision Making

Human Resource Management and Labor Relations

Marketing Processes and Consumer Behavior

Developing and Pricing Products

Distributing and Promoting Products

Information Technology (IT)for Business

The Role of Accountants and Accounting Information

Understanding Money and the Role of Banking

Filters

Exam 17: Managing Business Finances

How is the market value of a stock determined?

What is the term for a division of stock that gives stockholders a greater number of shares but does not change each individual's proportionate share of ownership?

Which of the following is the federal government agency that regulates U.S. securities markets?

Which of the following is an organization of individuals coordinated to provide an institutional setting in which stock can be bought and sold?

What is determined when the value of outstanding shares is multiplied by the number of outstanding shares?

What is the advantage of exchange-traded funds (EFTs)over mutual funds?

Explain what exchange-traded funds are and how they are tracked.

To avoid paying a commission on an investment, what type of fund might an investor choose?

The use of special knowledge about a firm, which results in an unfair advantage or generates profit or other types of gain, is known as what?

Which of the following is indicative of a bull market?

The largest stock exchange in the world is the Tokyo exchange.

Investments such as money market mutual funds offer what advantage to investors?

Because of the uncertainties involved in stock prices, investment professionals believe day-to-day prices to be a generally poor indicator of any stock's real value.

When issuing shares of stock, what is being given to stock holders in exchange for their investment in the organization?

Aggressive growth funds are designed for investors who can accept the risk of loss inherent in common stock investing with severe price fluctuations, but also the potential for superior returns over time.

For investors who do not want investment advice and wish to avoid paying a commission, what is the best type of broker assistance firm?

When a new bond is issued, when does the bond's par value have to be repaid?

More Americans are investing in the stock market through online trading. Explain the value of online trading.

Why should an investor consider diversification and asset allocation?

Which of the following is the name for a portion of the ownership of a corporation?

The U.S. Business Environment

Understanding Business Ethics and Social Responsibility

Entrepreneurship, New Ventures, and Business Ownership

Understanding the Global Context of Business

Managing the Business

Organizing the Business

Operations Management and Quality

Employee Behavior and Motivation

Leadership and Decision Making

Human Resource Management and Labor Relations

Marketing Processes and Consumer Behavior

Developing and Pricing Products

Distributing and Promoting Products

Information Technology (IT)for Business

The Role of Accountants and Accounting Information

Understanding Money and the Role of Banking

Filters