Question 1

Fundamental analysis looks at which of the following?

Accepted Answer

A)  future earnings 
B)  dividends 
C)  expected levels of interest rates 
D)  the firm's risk 
E)  all of the above 
A)  future earnings 
B)  dividends 
C)  expected levels of interest rates 
D)  the firm's risk 
E)  all of the above

Question 2

When a company buys back its own common stock it is engaging in a ________.

Accepted Answer

A)  stock split 
B)  stock reissue 
C)  stock repurchase 
D)  stock repo 
E)  none of the above 
A)  stock split 
B)  stock reissue 
C)  stock repurchase 
D)  stock repo 
E)  none of the above

Question 3

Compare and contrast the Dow Jones Industrial Average and Standard & Poor's 500-Stock Index.

Accepted Answer

The Dow attempts to gauge the well-being

Question 4

The firm will pay an annual dividend this year of $2 per share. The current market price of the stock is $40.00 per share. The book value of this stock is $24.00 per share. The earnings per share for this firm is $5.75. What is the current dividend yield of this stock?

Accepted Answer

A)  14.38% 
B)  8.33% 
C)  23.9% 
D)  5% 
A)  14.38% 
B)  8.33% 
C)  23.9% 
D)  5%

Question 5

Dividends are paid regardless if the company makes a profit.

Accepted Answer

A) True 
 B)False

Question 6

The book value of a company is calculated by ________.

Accepted Answer

A)  adding the price per share to the dividends paid 
B)  subtracting its price per share from the dividends paid 
C)  subtracting the value of all the firm's assets from the value of its liabilities 
D)  subtracting the value of all the firm's liabilities from the value of its assets 
A)  adding the price per share to the dividends paid 
B)  subtracting its price per share from the dividends paid 
C)  subtracting the value of all the firm's assets from the value of its liabilities 
D)  subtracting the value of all the firm's liabilities from the value of its assets

Question 7

Which of the following investment options is not affected by a change in the market rates of interest?

Accepted Answer

A)  common stocks 
B)  corporate bonds 
C)  government bonds 
D)  none of the above is correct; all are affected 
A)  common stocks 
B)  corporate bonds 
C)  government bonds 
D)  none of the above is correct; all are affected

Question 8

A stock market characterized by increasing prices is termed a(n) ________ market.

Accepted Answer

A)  bull 
B)  bear 
C)  animal 
D)  none of the above 
A)  bull 
B)  bear 
C)  animal 
D)  none of the above

Question 9

Which feature of common stock ownership allows a stockholder to share in the company's earnings after the creditors are paid?

Accepted Answer

A)  limited liability 
B)  claim on income 
C)  claims on assets 
D)  voting rights 
A)  limited liability 
B)  claim on income 
C)  claims on assets 
D)  voting rights

Question 10

During a "bear market" stocks prices typically fall.

Accepted Answer

A) True 
 B)False

Question 11

Microsoft is an example of a company whose common stock is considered to be a growth stock.

Accepted Answer

A) True 
 B)False

Question 12

Explain the common stock features and rights as though you are speaking to a novice.

Accepted Answer

Common stocks have limited liability; th

Question 13

Your mother-in-law's stockbroker focuses on supply and demand, and uses charts and computer programs to identify and make buy-sell recommendations. She is using the ________ method.

Accepted Answer

A)  descriptive analysis 
B)  visual hedging 
C)  technical analysis 
D)  push and shove 
E)  none of the above 
A)  descriptive analysis 
B)  visual hedging 
C)  technical analysis 
D)  push and shove 
E)  none of the above

Question 14

The dividend yield tells investors how much in the way of a return they would receive if the stock price and the dividend level remain constant.

Accepted Answer

A) True 
 B)False

Question 15

When the market becomes too bullish, the average P/E ratio will fall.

Accepted Answer

A) True 
 B)False

Question 16

Growth stocks are issued by companies that have exhibited sales and earnings growth well above their industry average.

Accepted Answer

A) True 
 B)False

Question 17

Defensive stocks frequently perform better during economic downturns.

Accepted Answer

A) True 
 B)False

Question 18

Some companies distribute earnings per share in the form of dividends and some retain these earnings for future investment in the firm.

Accepted Answer

A) True 
 B)False

Question 19

This approach is used regularly by security analysts to measure a stock's relative value, or how much investors are willing to pay for a dollar of the company's earnings. It is found by dividing the price per share by the earnings per share and is called the ________.

Accepted Answer

A)  P/E ratio 
B)  technical industry analysis 
C)  fundamental analysis 
D)  discounted dividends valuation 
E)  market-to-price ratio 
A)  P/E ratio 
B)  technical industry analysis 
C)  fundamental analysis 
D)  discounted dividends valuation 
E)  market-to-price ratio

Question 20

What is the importance of the P/E Ratio to investors?

Accepted Answer

The P/E ratio is a measure of risk and t

Fundamental analysis looks at which of the following?

When a company buys back its own common stock it is engaging in a ________.

Compare and contrast the Dow Jones Industrial Average and Standard & Poor's 500-Stock Index.

The firm will pay an annual dividend this year of $2 per share. The current market price of the stock is $40.00 per share. The book value of this stock is $24.00 per share. The earnings per share for this firm is $5.75. What is the current dividend yield of this stock?

Dividends are paid regardless if the company makes a profit.

The book value of a company is calculated by ________.

Which of the following investment options is not affected by a change in the market rates of interest?

A stock market characterized by increasing prices is termed a(n) ________ market.

Which feature of common stock ownership allows a stockholder to share in the company's earnings after the creditors are paid?

During a "bear market" stocks prices typically fall.

Microsoft is an example of a company whose common stock is considered to be a growth stock.

Explain the common stock features and rights as though you are speaking to a novice.

Your mother-in-law's stockbroker focuses on supply and demand, and uses charts and computer programs to identify and make buy-sell recommendations. She is using the ________ method.

The dividend yield tells investors how much in the way of a return they would receive if the stock price and the dividend level remain constant.

When the market becomes too bullish, the average P/E ratio will fall.

Growth stocks are issued by companies that have exhibited sales and earnings growth well above their industry average.

Defensive stocks frequently perform better during economic downturns.

Some companies distribute earnings per share in the form of dividends and some retain these earnings for future investment in the firm.

This approach is used regularly by security analysts to measure a stock's relative value, or how much investors are willing to pay for a dollar of the company's earnings. It is found by dividing the price per share by the earnings per share and is called the ________.

What is the importance of the P/E Ratio to investors?

The Financial Planning Process

Measuring Your Financial Health and Making a Plan

Understanding and Appreciating the Time Value of Money

Tax Planning and Strategies

Cash or Liquid Asset Management

Using Credit Cards: The Role of Open Credit

Using Consumer Loans: The Role of Planned Borrowing

The Home and Automobile Decision

Life and Health Insurance

Property and Liability Insurance

Investment Basics

Securities Markets

Investing in Bonds and Other Alternatives

Mutual Funds: An Easy Way to Diversify

Retirement Planning

Estate Planning: Saving Your Heirs Money and Headaches

Financial Life Events Fitting the Pieces Together

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Exam 13: Investing in Stocks

Fundamental analysis looks at which of the following?

When a company buys back its own common stock it is engaging in a ________.

Compare and contrast the Dow Jones Industrial Average and Standard & Poor's 500-Stock Index.

The firm will pay an annual dividend this year of $2 per share. The current market price of the stock is $40.00 per share. The book value of this stock is $24.00 per share. The earnings per share for this firm is $5.75. What is the current dividend yield of this stock?

Dividends are paid regardless if the company makes a profit.

The book value of a company is calculated by ________.

Which of the following investment options is not affected by a change in the market rates of interest?

A stock market characterized by increasing prices is termed a(n) ________ market.

Which feature of common stock ownership allows a stockholder to share in the company's earnings after the creditors are paid?

During a "bear market" stocks prices typically fall.

Microsoft is an example of a company whose common stock is considered to be a growth stock.

Explain the common stock features and rights as though you are speaking to a novice.

Your mother-in-law's stockbroker focuses on supply and demand, and uses charts and computer programs to identify and make buy-sell recommendations. She is using the ________ method.

The dividend yield tells investors how much in the way of a return they would receive if the stock price and the dividend level remain constant.

When the market becomes too bullish, the average P/E ratio will fall.

Growth stocks are issued by companies that have exhibited sales and earnings growth well above their industry average.

Defensive stocks frequently perform better during economic downturns.

Some companies distribute earnings per share in the form of dividends and some retain these earnings for future investment in the firm.

This approach is used regularly by security analysts to measure a stock's relative value, or how much investors are willing to pay for a dollar of the company's earnings. It is found by dividing the price per share by the earnings per share and is called the ________.

What is the importance of the P/E Ratio to investors?

The Financial Planning Process

Measuring Your Financial Health and Making a Plan

Understanding and Appreciating the Time Value of Money

Tax Planning and Strategies

Cash or Liquid Asset Management

Using Credit Cards: The Role of Open Credit

Using Consumer Loans: The Role of Planned Borrowing

The Home and Automobile Decision

Life and Health Insurance

Property and Liability Insurance

Investment Basics

Securities Markets

Investing in Bonds and Other Alternatives

Mutual Funds: An Easy Way to Diversify

Retirement Planning

Estate Planning: Saving Your Heirs Money and Headaches

Financial Life Events Fitting the Pieces Together

Filters