Question 1

A mutual fund is an investment company that buys stocks and bonds and then sells shares in those securities to the public.

Accepted Answer

A) True 
 B)False

Question 2

Ace Corporation pays its cumulative preferred stock $1.95 per share. There are 40,000 shares of preferred and 80,000 shares of common. In 2012, 2013, and 2014, because of slowdowns in the economy, Ace paid no dividends. Now, in 2015, the board of directors has decided to pay out $600,000 in dividends. The common stockholders receive:

Accepted Answer

A) $312,000 
B) $288,000 
C) $366,000 
D) $444,000 
E) None of these 
A) $312,000 
B) $288,000 
C) $366,000 
D) $444,000 
E) None of these

Question 3

A bond that closed today at 94 down 2 closed yesterday in dollars at:

Accepted Answer

A) $960 
B) $940 
C) $950 
D) $930 
E) None of these 
A) $960 
B) $940 
C) $950 
D) $930 
E) None of these

Question 4

McDonald's Corp (MCD) stock is selling for $90.24 per share. They offer a dividend of $2.80 per share. What is the stock yield? (Round to nearest tenth.)

Accepted Answer

A) 3.1% 
B) .031% 
C) 5.8% 
D) .059% 
E) None of these 
A) 3.1% 
B) .031% 
C) 5.8% 
D) .059% 
E) None of these

Question 5

The previous day's close of a stock is listed in today's transactions.

Accepted Answer

A) True 
 B)False

Question 6

Jangles Co. earned $1.80 per share. Assuming a closing price of $40, the PE ratio is: (round to the nearest whole answer)

Accepted Answer

A) 7 
B) 22 
C) 72 
D) 20 
E) None of these 
A) 7 
B) 22 
C) 72 
D) 20 
E) None of these

Question 7

Tim Sport bought four bonds of ABC 6 1/2 16 at 78.125. Can you help Tim calculate his (A) total annual interest, (B) total cost, and (C) current yield to the nearest tenth percent?

Accepted Answer

The answer of Tim Sport bought four bonds of ABC...

Question 8

The NAV helps an investor keep track of the value of his or her investment.

Accepted Answer

A) True 
 B)False

Question 9

The stock of VIC Corporation is trading at $39.63. The price-earnings ratio is 16 times earnings. The earnings per share for VIC Corporation are:

Accepted Answer

A) $2.84 
B) $2.48 
C) $4.96 
D) $6.34 
E) None of these 
A) $2.84 
B) $2.48 
C) $4.96 
D) $6.34 
E) None of these

Question 10

A bond quote of 82.25 in dollars is equal to:

Accepted Answer

A) $82.25 
B) $8.25 
C) $8,025.50 
D) $822.50 
E) None of these 
A) $82.25 
B) $8.25 
C) $8,025.50 
D) $822.50 
E) None of these

Question 11

Dividends in arrears mean:

Accepted Answer

A) No past dividends have been omitted 
B) Preferred has been paid but not holders of common stock 
C) Common stock must receive additional dividends not paid 
D) A specific amount of dividends has not been paid 
E) None of these 
A) No past dividends have been omitted 
B) Preferred has been paid but not holders of common stock 
C) Common stock must receive additional dividends not paid 
D) A specific amount of dividends has not been paid 
E) None of these

Question 12

The price-earnings ratio is calculated by the closing price per share of stock divided by:

Accepted Answer

A) Quarterly earnings per share 
B) Dividend per year 
C) Annual earnings per share 
D) Net change 
E) None of these 
A) Quarterly earnings per share 
B) Dividend per year 
C) Annual earnings per share 
D) Net change 
E) None of these

Question 13

Bee Sting bought 400 shares of Google at $399.75 per share. Assume a commission of 2% of the purchase price. What is the total to Bee?

Accepted Answer

A) $159,900 
B) $156,702 
C) $163,980 
D) $163,098 
E) None of these 
A) $159,900 
B) $156,702 
C) $163,980 
D) $163,098 
E) None of these

Question 14

The offer price of a mutual fund is always the NAV and commission.

Accepted Answer

A) True 
 B)False

Question 15

Abby Ring buys five bonds of Moe Co. 12 3/4 15 at 89.375 with a commission of $5.00 per bond. Her total annual interest is:

Accepted Answer

A) $127.50 
B) $637.05 
C) $1,275 
D) $637.50 
E) None of these 
A) $127.50 
B) $637.05 
C) $1,275 
D) $637.50 
E) None of these

Question 16

The bond of Tuckpeck is 8¼ 14. The bond traded for a high of 93.25 and closed at 93. The current yield of the bond to the nearest tenth of a percent is:

Accepted Answer

A) 8.8% 
B) 8.7% 
C) 8.9% 
D) 8.6% 
E) None of these 
A) 8.8% 
B) 8.7% 
C) 8.9% 
D) 8.6% 
E) None of these

Question 17

Preferred stock can:

Accepted Answer

A) Be cumulative 
B) Have equal rights to common stock 
C) Never receive dividends in arrears 
D) Never have preference to dividends over common stockholders 
E) None of these 
A) Be cumulative 
B) Have equal rights to common stock 
C) Never receive dividends in arrears 
D) Never have preference to dividends over common stockholders 
E) None of these

Question 18

Exxon sells its bonds at 108.375. The amount of premium or discount the bond is selling for is:

Accepted Answer

A) $17.35 
B) $13.75 
C) $13.25 
D) $13.57 
E) None of these 
A) $17.35 
B) $13.75 
C) $13.25 
D) $13.57 
E) None of these

Question 19

Stocks are always quoted in:

Accepted Answer

A) Percents 
B) Quarters of a dollar 
C) Decimals 
D) Quarter lots 
E) None of these 
A) Percents 
B) Quarters of a dollar 
C) Decimals 
D) Quarter lots 
E) None of these

Question 20

ARUN stock closed at $8.11 + $.33. Yesterday's closing price was:

Accepted Answer

A) $8.44 
B) $8.40 
C) $7.78 
D) $7.87 
E) None of these 
A) $8.44 
B) $8.40 
C) $7.78 
D) $7.87 
E) None of these

Exam 21: Stocks, Bonds and Mutual Funds

A mutual fund is an investment company that buys stocks and bonds and then sells shares in those securities to the public.

A bond that closed today at 94 down 2 closed yesterday in dollars at:

McDonald's Corp (MCD) stock is selling for $90.24 per share. They offer a dividend of $2.80 per share. What is the stock yield? (Round to nearest tenth.)

The previous day's close of a stock is listed in today's transactions.

Jangles Co. earned $1.80 per share. Assuming a closing price of $40, the PE ratio is: (round to the nearest whole answer)

Tim Sport bought four bonds of ABC 6 1/2 16 at 78.125. Can you help Tim calculate his (A) total annual interest, (B) total cost, and (C) current yield to the nearest tenth percent?

The NAV helps an investor keep track of the value of his or her investment.

The stock of VIC Corporation is trading at $39.63. The price-earnings ratio is 16 times earnings. The earnings per share for VIC Corporation are:

A bond quote of 82.25 in dollars is equal to:

Dividends in arrears mean:

The price-earnings ratio is calculated by the closing price per share of stock divided by:

Bee Sting bought 400 shares of Google at $399.75 per share. Assume a commission of 2% of the purchase price. What is the total to Bee?

The offer price of a mutual fund is always the NAV and commission.

Abby Ring buys five bonds of Moe Co. 12 3/4 15 at 89.375 with a commission of $5.00 per bond. Her total annual interest is:

The bond of Tuckpeck is 8¼ 14. The bond traded for a high of 93.25 and closed at 93. The current yield of the bond to the nearest tenth of a percent is:

Preferred stock can:

Exxon sells its bonds at 108.375. The amount of premium or discount the bond is selling for is:

Stocks are always quoted in:

ARUN stock closed at $8.11 + $.33. Yesterday's closing price was:

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