Question 1

A bond is quoted as a 6.5% coupon. The par value of the bond is $1,000, and the market value is $1,200. The bondholder would receive _____ in interest per year.

Accepted Answer

A)  $78 
B)  $780 
C)  $65 
D)  $500 
E)  $650 
A)  $78 
B)  $780 
C)  $65 
D)  $500 
E)  $650

Question 2

From an investor's point of view, the most important feature of a convertible bond is its:

Accepted Answer

A)  coupon rate. 
B)  conversion ratio. 
C)  conversion value. 
D)  bond rating. 
E)  dirty price. 
A)  coupon rate. 
B)  conversion ratio. 
C)  conversion value. 
D)  bond rating. 
E)  dirty price.

Question 3

_____  dividends are the most common form of dividends.

Accepted Answer

A)  Cash 
B)  Stock 
C)  Convertible 
D)  Reinvestment 
E)  Discount 
A)  Cash 
B)  Stock 
C)  Convertible 
D)  Reinvestment 
E)  Discount

Question 4

Changes in the general level of prices within an economy produce:

Accepted Answer

A)  business risk. 
B)  financial risk. 
C)  market risk. 
D)  purchasing power risk. 
E)  liquidity risk. 
A)  business risk. 
B)  financial risk. 
C)  market risk. 
D)  purchasing power risk. 
E)  liquidity risk.

Question 5

INSTRUCTIONS: 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. 
Common stockholders usually receive one vote per [ person | share ].

Accepted Answer

The answer of INSTRUCTIONS: Choose the word or phrase in...

Question 6

Which of the following statements regarding American Depositary Receipts (ADRs) is true?

Accepted Answer

A)  ADRs are traded only in foreign exchanges. 
B)  ADRs are denominated in foreign currencies. 
C)  ADRs represent a stated number of shares in a specific foreign company. 
D)  The investors in ADRs receive annual interest amounts in dollars. 
E)  The investors in ADRs receive dividends in foreign currencies. 
A)  ADRs are traded only in foreign exchanges. 
B)  ADRs are denominated in foreign currencies. 
C)  ADRs represent a stated number of shares in a specific foreign company. 
D)  The investors in ADRs receive annual interest amounts in dollars. 
E)  The investors in ADRs receive dividends in foreign currencies.

Question 7

Aside from the initial distribution of common stock when the corporation is formed, subsequent sales of additional shares may be made through a procedure known as a:

Accepted Answer

A)  trade-off. 
B)  public offering. 
C)  dividend reinvestment plan (DRP). 
D)  proxy. 
E)  call. 
A)  trade-off. 
B)  public offering. 
C)  dividend reinvestment plan (DRP). 
D)  proxy. 
E)  call.

Question 8

A bond was issued at a par value of $1,000 when the interest rate for similar bonds was 8%. Presently, new bonds issued with a similar creditworthiness have a 10% interest rate. Which of the following statements about the bond is most likely to be true?

Accepted Answer

A)  It is currently selling for a premium. 
B)  It is currently selling at a discount. 
C)  It is currently selling at par. 
D)  It is likely to be retired. 
E)  The bond's coupon rate will increase. 
A)  It is currently selling for a premium. 
B)  It is currently selling at a discount. 
C)  It is currently selling at par. 
D)  It is likely to be retired. 
E)  The bond's coupon rate will increase.

Question 9

The net income of Sunrise Corporation is $5 million, and shareholders' equity is $50 million. The return on equity (ROE) is:

Accepted Answer

A)  5%. 
B)  10%. 
C)  20%. 
D)  15%. 
E)  25%. 
A)  5%. 
B)  10%. 
C)  20%. 
D)  15%. 
E)  25%.

Question 10

INSTRUCTIONS: 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 yields on municipal bonds are usually [ lower | higher ] than the returns available from fully taxable issues.

Accepted Answer

The answer of INSTRUCTIONS: Choose the word or phrase in...

Question 11

A discount bond has a market value above par value.

Accepted Answer

A) True 
 B)False

Question 12

Stocks whose earnings and market price have increased at an above-average rate over time are called:

Accepted Answer

A)  cyclical stocks. 
B)  growth stocks. 
C)  income stocks. 
D)  speculative stocks. 
E)  defensive stocks. 
A)  cyclical stocks. 
B)  growth stocks. 
C)  income stocks. 
D)  speculative stocks. 
E)  defensive stocks.

Question 13

In the stock market, the market cap of a large-cap stock is:

Accepted Answer

A)  more than  $10 billion. 
B)  more than  $20 billion. 
C)  between $2 to $10 billion. 
D)  less than $2 billion. 
E)  between $5 to $10 million. 
A)  more than  $10 billion. 
B)  more than  $20 billion. 
C)  between $2 to $10 billion. 
D)  less than $2 billion. 
E)  between $5 to $10 million.

Question 14

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 15

Earnings per share (EPS) indicates to the stockholders the amount of dividends earned.

Accepted Answer

A) True 
 B)False

Question 16

INSTRUCTIONS: 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. 
In general, investments traded in [ broad | thin ] markets tend to be less liquid.

Accepted Answer

The answer of INSTRUCTIONS: Choose the word or phrase in...

Question 17

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

Accepted Answer

A) True 
 B)False

Question 18

INSTRUCTIONS: 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 face value of a corporate bond is usually [ $1,000 | $500 ].

Accepted Answer

The answer of INSTRUCTIONS: Choose the word or phrase in...

Question 19

Calculate the dividend yield on OPQ stock. Earnings per share (EPS) are $2.75, and the quarterly dividend is 25 cents. The book value is $15.20 per share, while the market value is $25.00. (Show all work.)

Accepted Answer

Dividend Yield = Annual Divide

Question 20

Use the following information to calculate the earnings per share (EPS) of Mercury Corporation. (Show all work. Round the answer to two decimal places.)

Accepted Answer

EPS = (Net Profit After Taxes

A bond is quoted as a 6.5% coupon. The par value of the bond is $1,000, and the market value is $1,200. The bondholder would receive _____ in interest per year.

From an investor's point of view, the most important feature of a convertible bond is its:

_____ dividends are the most common form of dividends.

Changes in the general level of prices within an economy produce:

INSTRUCTIONS: 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. Common stockholders usually receive one vote per [ person | share ].

Which of the following statements regarding American Depositary Receipts (ADRs) is true?

Aside from the initial distribution of common stock when the corporation is formed, subsequent sales of additional shares may be made through a procedure known as a:

A bond was issued at a par value of $1,000 when the interest rate for similar bonds was 8%. Presently, new bonds issued with a similar creditworthiness have a 10% interest rate. Which of the following statements about the bond is most likely to be true?

The net income of Sunrise Corporation is $5 million, and shareholders' equity is $50 million. The return on equity (ROE) is:

A discount bond has a market value above par value.

Stocks whose earnings and market price have increased at an above-average rate over time are called:

In the stock market, the market cap of a large-cap stock is:

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

Earnings per share (EPS) indicates to the stockholders the amount of dividends earned.

INSTRUCTIONS: 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. In general, investments traded in [ broad | thin ] markets tend to be less liquid.

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

INSTRUCTIONS: 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 face value of a corporate bond is usually [ $1,000 | $500 ].

Calculate the dividend yield on OPQ stock. Earnings per share (EPS) are $2.75, and the quarterly dividend is 25 cents. The book value is $15.20 per share, while the market value is $25.00. (Show all work.)

Use the following information to calculate the earnings per share (EPS) of Mercury Corporation. (Show all work. Round the answer to two decimal places.)

Understanding the Financial Planning Process

Developing Your Financial Statements and Plans

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 and Real Estate

Planning for Retirement

Preserving Your Estate

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Exam 12: Investing in Stocks and Bonds

A bond is quoted as a 6.5% coupon. The par value of the bond is $1,000, and the market value is $1,200. The bondholder would receive _____ in interest per year.

From an investor's point of view, the most important feature of a convertible bond is its:

_____ dividends are the most common form of dividends.

Changes in the general level of prices within an economy produce:

INSTRUCTIONS: 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. Common stockholders usually receive one vote per [ person | share ].

Which of the following statements regarding American Depositary Receipts (ADRs) is true?

Aside from the initial distribution of common stock when the corporation is formed, subsequent sales of additional shares may be made through a procedure known as a:

A bond was issued at a par value of $1,000 when the interest rate for similar bonds was 8%. Presently, new bonds issued with a similar creditworthiness have a 10% interest rate. Which of the following statements about the bond is most likely to be true?

The net income of Sunrise Corporation is $5 million, and shareholders' equity is $50 million. The return on equity (ROE) is:

A discount bond has a market value above par value.

Stocks whose earnings and market price have increased at an above-average rate over time are called:

In the stock market, the market cap of a large-cap stock is:

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

Earnings per share (EPS) indicates to the stockholders the amount of dividends earned.

INSTRUCTIONS: 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. In general, investments traded in [ broad | thin ] markets tend to be less liquid.

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

INSTRUCTIONS: 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 face value of a corporate bond is usually [ $1,000 | $500 ].

Calculate the dividend yield on OPQ stock. Earnings per share (EPS) are $2.75, and the quarterly dividend is 25 cents. The book value is $15.20 per share, while the market value is $25.00. (Show all work.)

Use the following information to calculate the earnings per share (EPS) of Mercury Corporation. (Show all work. Round the answer to two decimal places.)

Understanding the Financial Planning Process

Developing Your Financial Statements and Plans

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 and Real Estate

Planning for Retirement

Preserving Your Estate

Filters