Question 1

The ____ of a stock reflects stockholder confidence.

Accepted Answer

A)  par value 
B)  book value 
C)  face value 
D)  price/earnings ratio 
E)  dividend yield 
A)  par value 
B)  book value 
C)  face value 
D)  price/earnings ratio 
E)  dividend yield

Question 2

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.
-[Raising | Lowering] a bond rating will result in higher current yields.

Accepted Answer

The answer of Choose the word or phrase in [...

Question 3

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 Choose the word or phrase in [...

Question 4

If you buy a zero coupon bond,you will receive no cash from the corporation until the bond matures.

Accepted Answer

A) True 
 B)False

Question 5

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 Choose the word or phrase in [...

Question 6

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 Choose the word or phrase in [...

Question 7

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 Choose the word or phrase in [...

Question 8

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 9

A convertible bond is usually a

Accepted Answer

A)  government bond. 
B)  participating bond. 
C)  debenture. 
D)  mortgage bond. 
E)  junk bond. 
A)  government bond. 
B)  participating bond. 
C)  debenture. 
D)  mortgage bond. 
E)  junk bond.

Question 10

____ stocks would generally be considered appropriate for investors who fully understand the risks involved and can tolerate such risk exposure.

Accepted Answer

A)  Large-cap 
B)  Mid-cap 
C)  Penny 
D)  Small-cap 
E)  B and d 
A)  Large-cap 
B)  Mid-cap 
C)  Penny 
D)  Small-cap 
E)  B and d

Question 11

Which of the following would be a disadvantage of owning an income stock?

Accepted Answer

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

Question 12

The minimum rate of return you would like to receive in compensation for the amount of risk you have assumed is the

Accepted Answer

A)  desired rate of return. 
B)  actual rate of return. 
C)  exact rate of return. 
D)  approximate yield. 
E)  none of these. 
A)  desired rate of return. 
B)  actual rate of return. 
C)  exact rate of return. 
D)  approximate yield. 
E)  none of these.

Question 13

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 14

Common stockholders are considered to be the residual owners of the company.

Accepted Answer

A) True 
 B)False

Question 15

A bond is issued at $1,000 par value during a time in which interest rates for similar bonds were 8%.Today new bonds issued with a similar credit worthiness is 10%.Which of the following is most likely to be true about the bond.

Accepted Answer

A)  It is currently selling for a premium 
B)  It is currently selling at a discount 
C)  currently selling at par 
D)  The bond is likely to be called 
E)  none of the above 
A)  It is currently selling for a premium 
B)  It is currently selling at a discount 
C)  currently selling at par 
D)  The bond is likely to be called 
E)  none of the above

Question 16

Bond return can include both interest and capital gains.

Accepted Answer

A) True 
 B)False

Question 17

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

Accepted Answer

A) True 
 B)False

Question 18

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

Accepted Answer

A) True 
 B)False

Question 19

The higher the tax bracket you are in,the more attractive the purchase of municipal bonds becomes.

Accepted Answer

A) True 
 B)False

Question 20

Advantages of common stock investments include

Accepted Answer

A)  guaranteed dividend income. 
B)  potential for high return 
C)  liquidity. 
D)  b and c 
E)  a, b, and c 
A)  guaranteed dividend income. 
B)  potential for high return 
C)  liquidity. 
D)  b and c 
E)  a, b, and c

The ____ of a stock reflects stockholder confidence.

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. -[Raising | Lowering] a bond rating will result in higher current yields.

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].

If you buy a zero coupon bond,you will receive no cash from the corporation until the bond matures.

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.

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.

The returns you would expect from your investments could be

A convertible bond is usually a

____ stocks would generally be considered appropriate for investors who fully understand the risks involved and can tolerate such risk exposure.

Which of the following would be a disadvantage of owning an income stock?

The minimum rate of return you would like to receive in compensation for the amount of risk you have assumed is the

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

Common stockholders are considered to be the residual owners of the company.

A bond is issued at $1,000 par value during a time in which interest rates for similar bonds were 8%.Today new bonds issued with a similar credit worthiness is 10%.Which of the following is most likely to be true about the bond.

Bond return can include both interest and capital gains.

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

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

The higher the tax bracket you are in,the more attractive the purchase of municipal bonds becomes.

Advantages of common stock investments include

Understanding the Financial Planning Process

Using Financial Statements and Budgets

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

The ____ of a stock reflects stockholder confidence.

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. -[Raising | Lowering] a bond rating will result in higher current yields.

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].

If you buy a zero coupon bond,you will receive no cash from the corporation until the bond matures.

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.

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.

The returns you would expect from your investments could be

A convertible bond is usually a

____ stocks would generally be considered appropriate for investors who fully understand the risks involved and can tolerate such risk exposure.

Which of the following would be a disadvantage of owning an income stock?

The minimum rate of return you would like to receive in compensation for the amount of risk you have assumed is the

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

Common stockholders are considered to be the residual owners of the company.

A bond is issued at $1,000 par value during a time in which interest rates for similar bonds were 8%.Today new bonds issued with a similar credit worthiness is 10%.Which of the following is most likely to be true about the bond.

Bond return can include both interest and capital gains.

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

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

The higher the tax bracket you are in,the more attractive the purchase of municipal bonds becomes.

Advantages of common stock investments include

Understanding the Financial Planning Process

Using Financial Statements and Budgets

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