Question 1

All of the following are true statements about common stock dividends, except

Accepted Answer

A)  dividends are not generally paid by tech growth companies. 
B)  no dividends may be paid. 
C)  dividends are usually between 1% and 3% of the stock's price. 
D)  dividends are contractually guaranteed to common stockholders. 
A)  dividends are not generally paid by tech growth companies. 
B)  no dividends may be paid. 
C)  dividends are usually between 1% and 3% of the stock's price. 
D)  dividends are contractually guaranteed to common stockholders.

Question 2

The risk-return relationship means

Accepted Answer

A)  the lower the risk, the higher the return. 
B)  the higher the risk, the lower the return. 
C)  the higher the risk, the higher the return. 
D)  risk and return have little or no correlation. 
A)  the lower the risk, the higher the return. 
B)  the higher the risk, the lower the return. 
C)  the higher the risk, the higher the return. 
D)  risk and return have little or no correlation.

Question 3

It is December 10th and you have a stock that you purchased last January 5th, which has increased in value by more than $3,000. You think the stock will not significantly increase or decrease in value over the next month or so, and you would like to take your gain. What should you do?

Accepted Answer

A)  Sell the stock today and take the gain. 
B)  Wait until December 30th and sell the stock then. 
C)  Sell the stock on January 6th of next year or later. 
D)  Do not sell the stock until it starts to go down in value. 
A)  Sell the stock today and take the gain. 
B)  Wait until December 30th and sell the stock then. 
C)  Sell the stock on January 6th of next year or later. 
D)  Do not sell the stock until it starts to go down in value.

Question 4

Growth stocks tend to

Accepted Answer

A)  be those of more established companies. 
B)  offer great opportunities for capital appreciation. 
C)  pay high dividends. 
D)  be favored by more conservative investors. 
A)  be those of more established companies. 
B)  offer great opportunities for capital appreciation. 
C)  pay high dividends. 
D)  be favored by more conservative investors.

Question 5

If you wish to have a direct voice in the running of a company, you should purchase

Accepted Answer

A)  bonds. 
B)  notes. 
C)  common stock. 
D)  preferred stock. 
A)  bonds. 
B)  notes. 
C)  common stock. 
D)  preferred stock.

Question 6

If you have $5,000 to invest but will need to use the funds in three years to buy a home, you should

Accepted Answer

A)  invest in a diversified stock mutual fund. 
B)  buy stocks of relatively stable firms that have low risk. 
C)  buy a three-year CD. 
D)  put the money in a money market savings account. 
A)  invest in a diversified stock mutual fund. 
B)  buy stocks of relatively stable firms that have low risk. 
C)  buy a three-year CD. 
D)  put the money in a money market savings account.

Question 7

One advantage of investing in commercial real estate compared to stock, bonds, and mutual funds is that real estate

Accepted Answer

A)  is more likely to go up in value. 
B)  is more marketable. 
C)  may yield income and tax advantages not available with the other investments. 
D)  is less risky than the other investments. 
A)  is more likely to go up in value. 
B)  is more marketable. 
C)  may yield income and tax advantages not available with the other investments. 
D)  is less risky than the other investments.

Question 8

A company has a choice of whether to distribute dividends to common shareholders or to keep its profits in the company as retained earnings.

Accepted Answer

A) True 
 B)False

Question 9

Which of the following is not true of common stock?

Accepted Answer

A)  Common stock represents partial ownership in the firm. 
B)  Common stock is riskier than preferred stock. 
C)  Investors in common stock are given voting rights. 
D)  Investors in common stock are guaranteed a dividend. 
A)  Common stock represents partial ownership in the firm. 
B)  Common stock is riskier than preferred stock. 
C)  Investors in common stock are given voting rights. 
D)  Investors in common stock are guaranteed a dividend.

Question 10

The time value of money concepts do not include

Accepted Answer

A)  interest or the cost of money. 
B)  payments of principal and interest. 
C)  present and future values. 
D)  the risks associated with various investments. 
A)  interest or the cost of money. 
B)  payments of principal and interest. 
C)  present and future values. 
D)  the risks associated with various investments.

Question 11

What would be the return on 200 shares of stock purchased on January 1, 2016 for $60 per share and sold on December 31, 2016 at $80 per share? Also assume that the company paid dividends of $2 per share over the year. The prices include all brokerage fees. Round to the nearest whole percent.

Accepted Answer

A)  37% 
B)  25% 
C)  33% 
D)  40% 
A)  37% 
B)  25% 
C)  33% 
D)  40%

Question 12

Common stockholders usually have more dividend rights than preferred stockholders.

Accepted Answer

A) True 
 B)False

Question 13

For minimal tax consequences, when your stock increases in value it should be held for

Accepted Answer

A)  four months or longer. 
B)  over a year. 
C)  under a year. 
D)  five years or longer. 
A)  four months or longer. 
B)  over a year. 
C)  under a year. 
D)  five years or longer.

Question 14

Use the following two columns of items to answer the matching questions below:
-common stock
A)first offering of a firm's stock to the public
B)facilities that allow investors to purchase or sell existing stocks
C)investors owning this type of stock have priority over common stockholders in receiving dividends
D)market where existing securities are sold
E)individual investors who buy and sell stocks within a day
F)financial instruments that represent partial ownership of a firm
G)debt instruments issued by the government or corporations to borrow money from investors
H)professionals responsible for clients' funds

Accepted Answer

The answer of Use the following two columns of items...

Question 15

In addition to the interest earned on a bond, it is also possible that the actual bond will increase in value over time.

Accepted Answer

A) True 
 B)False

Question 16

One of the factors impacting the risks of investments is the time period you have available to keep your money invested.

Accepted Answer

A) True 
 B)False

Question 17

A stock's ________ is a measure of the degree of volatility in a stock's returns over time.

Accepted Answer

A)  range of returns 
B)  standard deviation 
C)  beta 
D)  value 
A)  range of returns 
B)  standard deviation 
C)  beta 
D)  value

Question 18

The security that represents equity or ownership of a corporation is

Accepted Answer

A)  common stock. 
B)  corporate bonds. 
C)  long-term loans. 
D)  commercial paper. 
A)  common stock. 
B)  corporate bonds. 
C)  long-term loans. 
D)  commercial paper.

Question 19

Before you start an investment program, you should ensure liquidity by having money in financial institutions or in money market securities.

Accepted Answer

A) True 
 B)False

Question 20

The return you will earn on certain stocks and bonds is uncertain because specific prices are not guaranteed.

Accepted Answer

A) True 
 B)False

All of the following are true statements about common stock dividends, except

The risk-return relationship means

It is December 10th and you have a stock that you purchased last January 5th, which has increased in value by more than $3,000. You think the stock will not significantly increase or decrease in value over the next month or so, and you would like to take your gain. What should you do?

Growth stocks tend to

If you wish to have a direct voice in the running of a company, you should purchase

If you have $5,000 to invest but will need to use the funds in three years to buy a home, you should

One advantage of investing in commercial real estate compared to stock, bonds, and mutual funds is that real estate

A company has a choice of whether to distribute dividends to common shareholders or to keep its profits in the company as retained earnings.

Which of the following is not true of common stock?

The time value of money concepts do not include

What would be the return on 200 shares of stock purchased on January 1, 2016 for $60 per share and sold on December 31, 2016 at $80 per share? Also assume that the company paid dividends of $2 per share over the year. The prices include all brokerage fees. Round to the nearest whole percent.

Common stockholders usually have more dividend rights than preferred stockholders.

For minimal tax consequences, when your stock increases in value it should be held for

In addition to the interest earned on a bond, it is also possible that the actual bond will increase in value over time.

One of the factors impacting the risks of investments is the time period you have available to keep your money invested.

A stock's ________ is a measure of the degree of volatility in a stock's returns over time.

The security that represents equity or ownership of a corporation is

Before you start an investment program, you should ensure liquidity by having money in financial institutions or in money market securities.

The return you will earn on certain stocks and bonds is uncertain because specific prices are not guaranteed.

Overview of a Financial Plan

Planning With Personal Financial Statements

Applying Time Value Concepts

Using Tax Concepts for Planning

Banking and Interest Rates

Managing Your Money

Assessing and Securing Your Credit

Managing Your Credit

Personal Loans

Purchasing and Financing a Home

Auto and Homeowners Insurance

Health and Disability Insurance

Life Insurance

Investing in Stocks

Investing in Bonds

Investing in Mutual Funds

Asset Allocation

Retirement Planning

Estate Planning

Integrating the Components of a Financial Plan

Filters

Exam 14: Investing Fundamentals

All of the following are true statements about common stock dividends, except

The risk-return relationship means

It is December 10th and you have a stock that you purchased last January 5th, which has increased in value by more than $3,000. You think the stock will not significantly increase or decrease in value over the next month or so, and you would like to take your gain. What should you do?

Growth stocks tend to

If you wish to have a direct voice in the running of a company, you should purchase

If you have $5,000 to invest but will need to use the funds in three years to buy a home, you should

One advantage of investing in commercial real estate compared to stock, bonds, and mutual funds is that real estate

A company has a choice of whether to distribute dividends to common shareholders or to keep its profits in the company as retained earnings.

Which of the following is not true of common stock?

The time value of money concepts do not include

What would be the return on 200 shares of stock purchased on January 1, 2016 for $60 per share and sold on December 31, 2016 at $80 per share? Also assume that the company paid dividends of $2 per share over the year. The prices include all brokerage fees. Round to the nearest whole percent.

Common stockholders usually have more dividend rights than preferred stockholders.

For minimal tax consequences, when your stock increases in value it should be held for

In addition to the interest earned on a bond, it is also possible that the actual bond will increase in value over time.

One of the factors impacting the risks of investments is the time period you have available to keep your money invested.

A stock's ________ is a measure of the degree of volatility in a stock's returns over time.

The security that represents equity or ownership of a corporation is

Before you start an investment program, you should ensure liquidity by having money in financial institutions or in money market securities.

The return you will earn on certain stocks and bonds is uncertain because specific prices are not guaranteed.

Overview of a Financial Plan

Planning With Personal Financial Statements

Applying Time Value Concepts

Using Tax Concepts for Planning

Banking and Interest Rates

Managing Your Money

Assessing and Securing Your Credit

Managing Your Credit

Personal Loans

Purchasing and Financing a Home

Auto and Homeowners Insurance

Health and Disability Insurance

Life Insurance

Investing in Stocks

Investing in Bonds

Investing in Mutual Funds

Asset Allocation

Retirement Planning

Estate Planning

Integrating the Components of a Financial Plan

Filters