Question 1

Bondholders will receive interest payments after the stockholders receive dividends.

Accepted Answer

A) True 
 B)False

Question 2

Which of the following types of bonds are unsecured?

Accepted Answer

A)  mortgage bond 
B)  equipment trust certificate 
C)  debenture bond 
D)  agency bond 
E)  all of the above are unsecured 
A)  mortgage bond 
B)  equipment trust certificate 
C)  debenture bond 
D)  agency bond 
E)  all of the above are unsecured

Question 3

An example of event risk would be

Accepted Answer

A)  inflation. 
B)  a corporate takeover. 
C)  a newspaper article about the economy. 
D)  earnings announcements. 
E)  capital growth. 
A)  inflation. 
B)  a corporate takeover. 
C)  a newspaper article about the economy. 
D)  earnings announcements. 
E)  capital growth.

Question 4

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

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

Accepted Answer

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

Question 6

A Puppy Pet Services $1,000 bond has a 7 1/2% coupon rate,matures in 2010 and is currently quoted at 82.The current yield is

Accepted Answer

A)  6.15%. 
B)  7.50%. 
C)  9.15%. 
D)  10.27%. 
E)  11.43%. 
A)  6.15%. 
B)  7.50%. 
C)  9.15%. 
D)  10.27%. 
E)  11.43%.

Question 7

Calculate the approximate yield on the common stock of Bowl Game that Matty Smelt has owned for 4 years.She bought it for $10 per share and sold it for $25.The dividend was $1.50 each year.(Show all work.)

Accepted Answer

The answer of Calculate the approximate yield on the common...

Question 8

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 dividends per share divided by market price per share equals [total yield | dividend yield].

Accepted Answer

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

Question 9

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.
-Stocks of stable,older companies are called [earnings | blue chip] stocks.

Accepted Answer

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

Question 10

Tech stocks represent stocks in the technology and utility sectors.

Accepted Answer

A) True 
 B)False

Question 11

The easiest way to invest in foreign stock is to purchase

Accepted Answer

A)  the stock directly from an over sea's broker. 
B)  the stock directly from your regular broker. 
C)  the stock directly over the Internet. 
D)  international mutual funds. 
E)  American Depository Receipts. 
A)  the stock directly from an over sea's broker. 
B)  the stock directly from your regular broker. 
C)  the stock directly over the Internet. 
D)  international mutual funds. 
E)  American Depository Receipts.

Question 12

The approximate yield to maturity when the average income is $1.00,the average capital gain is $5.00,the average investment is $26.00,and the investment is held for 10 years is

Accepted Answer

A)  11 percent. 
B)  23 percent. 
C)  27 percent. 
D)  33 percent. 
E)  50 percent. 
A)  11 percent. 
B)  23 percent. 
C)  27 percent. 
D)  33 percent. 
E)  50 percent.

Question 13

Convertible preferred stock can be exchanged for common stock.

Accepted Answer

A) True 
 B)False

Question 14

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 [lower | higher] a bond's rating,the more likely the issuer will default.

Accepted Answer

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

Question 15

Dividend Reinvestment Plans provide shareholders with cash,so that they can invest in similar stocks.

Accepted Answer

A) True 
 B)False

Question 16

Event risk occurs when something substantial happens to a company that has an immediate impact on its financial condition.

Accepted Answer

A) True 
 B)False

Question 17

Preferred stock can be exchanged for common stock.

Accepted Answer

A) True 
 B)False

Question 18

Junk bonds have higher risk and similar returns to investment grade bonds.

Accepted Answer

A) True 
 B)False

Question 19

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 [higher | lower] the PE ratio,the less confidence investors are said to have in the corporation.

Accepted Answer

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

Question 20

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.
-If the value of the underlying stock dropped drastically,the owner of a convertible bond [would still receive $1,000 | would receive the market value of the stock] at maturity.

Accepted Answer

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

Bondholders will receive interest payments after the stockholders receive dividends.

Which of the following types of bonds are unsecured?

An example of event risk would be

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

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].

A Puppy Pet Services $1,000 bond has a 7 1/2% coupon rate,matures in 2010 and is currently quoted at 82.The current yield is

Calculate the approximate yield on the common stock of Bowl Game that Matty Smelt has owned for 4 years.She bought it for $10 per share and sold it for $25.The dividend was $1.50 each year.(Show all work.)

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 dividends per share divided by market price per share equals [total yield | dividend yield].

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. -Stocks of stable,older companies are called [earnings | blue chip] stocks.

Tech stocks represent stocks in the technology and utility sectors.

The easiest way to invest in foreign stock is to purchase

The approximate yield to maturity when the average income is $1.00,the average capital gain is $5.00,the average investment is $26.00,and the investment is held for 10 years is

Convertible preferred stock can be exchanged for common stock.

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 [lower | higher] a bond's rating,the more likely the issuer will default.

Dividend Reinvestment Plans provide shareholders with cash,so that they can invest in similar stocks.

Event risk occurs when something substantial happens to a company that has an immediate impact on its financial condition.

Preferred stock can be exchanged for common stock.

Junk bonds have higher risk and similar returns to investment grade bonds.

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 [higher | lower] the PE ratio,the less confidence investors are said to have in the corporation.

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

Bondholders will receive interest payments after the stockholders receive dividends.

Which of the following types of bonds are unsecured?

An example of event risk would be

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

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].

A Puppy Pet Services $1,000 bond has a 7 1/2% coupon rate,matures in 2010 and is currently quoted at 82.The current yield is

Calculate the approximate yield on the common stock of Bowl Game that Matty Smelt has owned for 4 years.She bought it for $10 per share and sold it for $25.The dividend was $1.50 each year.(Show all work.)

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 dividends per share divided by market price per share equals [total yield | dividend yield].

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. -Stocks of stable,older companies are called [earnings | blue chip] stocks.

Tech stocks represent stocks in the technology and utility sectors.

The easiest way to invest in foreign stock is to purchase

The approximate yield to maturity when the average income is $1.00,the average capital gain is $5.00,the average investment is $26.00,and the investment is held for 10 years is

Convertible preferred stock can be exchanged for common stock.

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 [lower | higher] a bond's rating,the more likely the issuer will default.

Dividend Reinvestment Plans provide shareholders with cash,so that they can invest in similar stocks.

Event risk occurs when something substantial happens to a company that has an immediate impact on its financial condition.

Preferred stock can be exchanged for common stock.

Junk bonds have higher risk and similar returns to investment grade bonds.

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 [higher | lower] the PE ratio,the less confidence investors are said to have in the corporation.

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