Exam 16: Securities and Investments

A company's capitalization or value is equal to the number of outstanding shares of stock times the price of one share of stock.

A retired person of modest means is best served by purchasing growth stocks.

What is the basic premise of the risk return relationship?

Regarding use of debt and equity financing, it's true that most large companies ________.

A(n)________ stock's price is greatly affected by the state of the economy because the company makes a product that can have highly variable demand.

A(n)________ stock pays a large dividend and is unlikely to experience major appreciation.

Callable bonds ________.

Debenture bonds are safer than secured bonds.

An asset allocation of 50% stocks, 45% bonds, and 5% cash is considered ________ risk.

Of the following, which is LEAST likely to buy stock in an IPO?

Most individual stock investors buy stock ________.

Trading stocks online yourself is less expensive than using a stockbroker.

Bonds issued by state and local governments are called ________.

What are the major factors that influence whether a company should raise money through either bonds or stocks?

Describe two ways to make money by investing in stocks.

An automobile company stock can best be characterized as being a ________ stock.

A state government would issue a ________ bond to finance the construction of a toll bridge and then use the tolls to pay for the bond.

In what circumstances do companies typically decide to pay dividends to stockholders?

If your retired grandmother had modest means, yet wanted to invest in stock, which type of stock would you advise her to buy?

A corporate bond backed by collateral is called a ________.