Question 1

If a corporation's earnings decline,generally the stock's price usually increases.

Accepted Answer

A) True 
 B)False

Question 2

When a corporation sells stock to the general public for the first time,it is referred to as a:

Accepted Answer

A) primary market opportunity. 
B) secondary market offering. 
C) initial public offering. 
D) investment bank offering. 
E) primary stockholder opportunity. 
A) primary market opportunity. 
B) secondary market offering. 
C) initial public offering. 
D) investment bank offering. 
E) primary stockholder opportunity.

Question 3

Martin Manufacturing stock has a market value of $24 a share.If the book value is $20 a share,the corporation's market-to-book ratio is:

Accepted Answer

A) 0.8 
B) 1.0 
C) 1.2 
D) 2.0 
E) 2.4 
A) 0.8 
B) 1.0 
C) 1.2 
D) 2.0 
E) 2.4

Question 4

A stock split is a procedure in which a stockholder's common stock is exchanged for preferred stock.

Accepted Answer

A) True 
 B)False

Question 5

Preferred stock is often referred to as a middle investment,because it represents an investment midway between common stock and corporate bonds.

Accepted Answer

A) True 
 B)False

Question 6

Beta is a measure that compares the volatility associated with a specific stock issue with the volatility of which stock index?

Accepted Answer

A) S&P 500 stock index 
B) Dow Jones Industrial Average 
C) NASDAQ composite index 
D) FTSE 100 index 
E) CAC 40 index 
A) S&P 500 stock index 
B) Dow Jones Industrial Average 
C) NASDAQ composite index 
D) FTSE 100 index 
E) CAC 40 index

Question 7

When stocks are trading at prices above their actual worth,the resulting situation is called a(n):

Accepted Answer

A) inflated corporate earnings. 
B) low unemployment rate. 
C) changes in government regulation. 
D) stock market bubble. 
E) economic turmoil. 
A) inflated corporate earnings. 
B) low unemployment rate. 
C) changes in government regulation. 
D) stock market bubble. 
E) economic turmoil.

Question 8

James Green just bought a stock which he expects will provide him with a quarterly cash payment,although that payment is not guaranteed.In fact,he expects the amount of the payment to vary over time.What type of payment is he expecting to receive?

Accepted Answer

A) Option premium 
B) Interest 
C) Capital gain 
D) Dividend 
E) Rebate 
A) Option premium 
B) Interest 
C) Capital gain 
D) Dividend 
E) Rebate

Question 9

Acme Widget,Inc.has 1,000 shareholders who own a total of two million shares of its common stock.The company earned $20 million after taxes and paid out $8 million in dividends.The company has assets of $250 million and liabilities of $50 million.What is the book value per share?

Accepted Answer

A) $2 
B) $8 
C) $20 
D) $100 
E) $250 
A) $2 
B) $8 
C) $20 
D) $100 
E) $250

Question 10

If the board of directors approves a two-for-one stock split,an investor who owns 125 shares before the split will own ________ shares after the split.

Accepted Answer

A) 75 
B) 125 
C) 225 
D) 250 
E) 450 
A) 75 
B) 125 
C) 225 
D) 250 
E) 450

Question 11

Ms.Hart's stock club uses numerous charts that plot past price movements and other market averages to predict the future direction for the market as a whole.Her club relies on ________ analysis to determine stock selections.

Accepted Answer

A) fundamental 
B) technical 
C) efficient market 
D) chart 
E) plot 
A) fundamental 
B) technical 
C) efficient market 
D) chart 
E) plot

Question 12

Explain what dollar cost averaging is and why an investor would use the technique.

Accepted Answer

Dollar cost averaging is a long-term tec

Question 13

To reduce anxiety when you make stock investment decisions,you should do all of the following except:

Accepted Answer

A) Evaluate each investment. 
B) Analyze the firm's finances. 
C) Track the firm's product line. 
D) Monitor economic developments. 
E) Hold the stocks for a short time for above average returns. 
A) Evaluate each investment. 
B) Analyze the firm's finances. 
C) Track the firm's product line. 
D) Monitor economic developments. 
E) Hold the stocks for a short time for above average returns.

Question 14

When choosing a brokerage firm,an investor should consider:

Accepted Answer

A) the amount of the commissions they charge. 
B) how much research information is available. 
C) how much research information costs. 
D) how much help you need when making an investment decision. 
E) All of these 
A) the amount of the commissions they charge. 
B) how much research information is available. 
C) how much research information costs. 
D) how much help you need when making an investment decision. 
E) All of these

Question 15

Sean Barber wants to invest in a stock that is relatively safe and is generally attractive to conservative investors.What type of stock best fits Sean's requirements?

Accepted Answer

A) Midcap stock 
B) Cyclical stock 
C) Small cap stock 
D) Blue chip stock 
E) Growth stock 
A) Midcap stock 
B) Cyclical stock 
C) Small cap stock 
D) Blue chip stock 
E) Growth stock

Question 16

The federal government requires that a corporation selling a new issue of securities must disclose information about the company and its finances in a(n):

Accepted Answer

A) annual report. 
B) quarterly report. 
C) accountant's audit report. 
D) prospectus. 
E) stock guide. 
A) annual report. 
B) quarterly report. 
C) accountant's audit report. 
D) prospectus. 
E) stock guide.

Question 17

Many analysts believe that a corporation's ability to generate ________ in the future is one of the most significant factors that account for an increase or decrease in the price of a stock.

Accepted Answer

A) stockholder support 
B) dividends 
C) earnings 
D) new business locations 
E) new business ideas 
A) stockholder support 
B) dividends 
C) earnings 
D) new business locations 
E) new business ideas

Question 18

James Brewer purchased 100 shares of stock for $73 a share.James also paid a $60 commission.What was the total purchase price for this transaction?

Accepted Answer

A) $60.00 
B) $73.00 
C) $7,300.00 
D) $7,360.00 
E) $8,000.00 
A) $60.00 
B) $73.00 
C) $7,300.00 
D) $7,360.00 
E) $8,000.00

Question 19

Earnings per share for a stock investment is calculated as:

Accepted Answer

A) after-tax income divided by the number of stockholders. 
B) the number of stockholders divided by after-tax income. 
C) after-tax income divided by the number of shares outstanding. 
D) the number of shares outstanding divided by after-tax income. 
E) None of these 
A) after-tax income divided by the number of stockholders. 
B) the number of stockholders divided by after-tax income. 
C) after-tax income divided by the number of shares outstanding. 
D) the number of shares outstanding divided by after-tax income. 
E) None of these

Question 20

The annualized holding period yield calculation takes into account the time the investment is held.

Accepted Answer

A) True 
 B)False

If a corporation's earnings decline,generally the stock's price usually increases.

When a corporation sells stock to the general public for the first time,it is referred to as a:

Martin Manufacturing stock has a market value of $24 a share.If the book value is $20 a share,the corporation's market-to-book ratio is:

A stock split is a procedure in which a stockholder's common stock is exchanged for preferred stock.

Preferred stock is often referred to as a middle investment,because it represents an investment midway between common stock and corporate bonds.

Beta is a measure that compares the volatility associated with a specific stock issue with the volatility of which stock index?

When stocks are trading at prices above their actual worth,the resulting situation is called a(n):

James Green just bought a stock which he expects will provide him with a quarterly cash payment,although that payment is not guaranteed.In fact,he expects the amount of the payment to vary over time.What type of payment is he expecting to receive?

Acme Widget,Inc.has 1,000 shareholders who own a total of two million shares of its common stock.The company earned $20 million after taxes and paid out $8 million in dividends.The company has assets of $250 million and liabilities of $50 million.What is the book value per share?

If the board of directors approves a two-for-one stock split,an investor who owns 125 shares before the split will own ________ shares after the split.

Ms.Hart's stock club uses numerous charts that plot past price movements and other market averages to predict the future direction for the market as a whole.Her club relies on ________ analysis to determine stock selections.

Explain what dollar cost averaging is and why an investor would use the technique.

To reduce anxiety when you make stock investment decisions,you should do all of the following except:

When choosing a brokerage firm,an investor should consider:

Sean Barber wants to invest in a stock that is relatively safe and is generally attractive to conservative investors.What type of stock best fits Sean's requirements?

The federal government requires that a corporation selling a new issue of securities must disclose information about the company and its finances in a(n):

Many analysts believe that a corporation's ability to generate ________ in the future is one of the most significant factors that account for an increase or decrease in the price of a stock.

James Brewer purchased 100 shares of stock for $73 a share.James also paid a $60 commission.What was the total purchase price for this transaction?

Earnings per share for a stock investment is calculated as:

The annualized holding period yield calculation takes into account the time the investment is held.

Personal Finance Basics and the Time Value of Money

Financial Aspects of Career Planning

Money Management Strategy: Financial Statements and Budgeting

Planning Your Tax Strategy

Financial Services: Savings Plans and Payment Accounts

Introduction to Consumer Credit

Choosing a Source of Credit: the Costs of Credit Alternatives

Consumer Purchasing Strategies and Legal Protection

The Housing Decision: Factors and Finances

Property and Motor Vehicle Insurance

Health,disability,and Long-Term Care Insurance

Life Insurance

Investing Fundamentals

Investing in Bonds

Investing in Mutual Funds

Investing in Real Estate and Other Investment Alternatives

Starting Early: Retirement Planning

Estate Planning

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Exam 14: Investing in Stocks

If a corporation's earnings decline,generally the stock's price usually increases.

When a corporation sells stock to the general public for the first time,it is referred to as a:

Martin Manufacturing stock has a market value of $24 a share.If the book value is $20 a share,the corporation's market-to-book ratio is:

A stock split is a procedure in which a stockholder's common stock is exchanged for preferred stock.

Preferred stock is often referred to as a middle investment,because it represents an investment midway between common stock and corporate bonds.

Beta is a measure that compares the volatility associated with a specific stock issue with the volatility of which stock index?

When stocks are trading at prices above their actual worth,the resulting situation is called a(n):

James Green just bought a stock which he expects will provide him with a quarterly cash payment,although that payment is not guaranteed.In fact,he expects the amount of the payment to vary over time.What type of payment is he expecting to receive?

Acme Widget,Inc.has 1,000 shareholders who own a total of two million shares of its common stock.The company earned $20 million after taxes and paid out $8 million in dividends.The company has assets of $250 million and liabilities of $50 million.What is the book value per share?

If the board of directors approves a two-for-one stock split,an investor who owns 125 shares before the split will own ________ shares after the split.

Ms.Hart's stock club uses numerous charts that plot past price movements and other market averages to predict the future direction for the market as a whole.Her club relies on ________ analysis to determine stock selections.

Explain what dollar cost averaging is and why an investor would use the technique.

To reduce anxiety when you make stock investment decisions,you should do all of the following except:

When choosing a brokerage firm,an investor should consider:

Sean Barber wants to invest in a stock that is relatively safe and is generally attractive to conservative investors.What type of stock best fits Sean's requirements?

The federal government requires that a corporation selling a new issue of securities must disclose information about the company and its finances in a(n):

Many analysts believe that a corporation's ability to generate ________ in the future is one of the most significant factors that account for an increase or decrease in the price of a stock.

James Brewer purchased 100 shares of stock for $73 a share.James also paid a $60 commission.What was the total purchase price for this transaction?

Earnings per share for a stock investment is calculated as:

The annualized holding period yield calculation takes into account the time the investment is held.

Personal Finance Basics and the Time Value of Money

Financial Aspects of Career Planning

Money Management Strategy: Financial Statements and Budgeting

Planning Your Tax Strategy

Financial Services: Savings Plans and Payment Accounts

Introduction to Consumer Credit

Choosing a Source of Credit: the Costs of Credit Alternatives

Consumer Purchasing Strategies and Legal Protection

The Housing Decision: Factors and Finances

Property and Motor Vehicle Insurance

Health,disability,and Long-Term Care Insurance

Life Insurance

Investing Fundamentals

Investing in Bonds

Investing in Mutual Funds

Investing in Real Estate and Other Investment Alternatives

Starting Early: Retirement Planning

Estate Planning

Filters