Question 1

If John executes a buy order to take place when the stock price of ABC Ltd.falls to $10,it is a(n)

Accepted Answer

A) on-stop order. 
B) limit buy order. 
C) buy stop order. 
D) sell stop order. 
A) on-stop order. 
B) limit buy order. 
C) buy stop order. 
D) sell stop order.

Question 2

A firm with a low debt ratio relative to the industry norm has a high degree of financial leverage and therefore may have a relatively high risk of default.

Accepted Answer

A) True 
 B)False

Question 3

You purchased stock worth $10 000 on margin (50 percent).Now the value of your stock has declined to $7000 and you receive a margin call.How much cash do you need to bring the margin back to the minimum level?

Accepted Answer

A) $1500 
B) $3000 
C) $5000 
D) $2000 
A) $1500 
B) $3000 
C) $5000 
D) $2000

Question 4

What can be said about broker and analyst recommendations?

Accepted Answer

A) They generally beat the markets. 
B) They tend to be optimistic on "buy" recommendations. 
C) They cannot own the stocks they recommend. 
D) They tend to give more "sell" recommendations. 
A) They generally beat the markets. 
B) They tend to be optimistic on "buy" recommendations. 
C) They cannot own the stocks they recommend. 
D) They tend to give more "sell" recommendations.

Question 5

How much should a share of stock be worth for a firm whose earnings per share are $4 if the industry's average P/E is 11?

Accepted Answer

A) $40 
B) $44 
C) $48 
D) $88 
A) $40 
B) $44 
C) $48 
D) $88

Question 6

In fundamental research you look for a stock that is

Accepted Answer

A) overvalued. 
B) from a well-known company. 
C) undervalued. 
D) trending upwards. 
A) overvalued. 
B) from a well-known company. 
C) undervalued. 
D) trending upwards.

Question 7

A firm's financial leverage indicates its reliance on debt to support its operations.

Accepted Answer

A) True 
 B)False

Question 8

If you need to be sure to buy shares of a company when the price rises above a certain level,you need to use a

Accepted Answer

A) buy limit order. 
B) buy stop order. 
C) buy market order. 
D) buy price order. 
A) buy limit order. 
B) buy stop order. 
C) buy market order. 
D) buy price order.

Question 9

Inflation is the measure of the increase in the general level of prices of products and services over a specified period.

Accepted Answer

A) True 
 B)False

Question 10

If a company's P/E is 20 and its industry's mean P/E is 15,the company is considered to be

Accepted Answer

A) overvalued. 
B) poorly managed. 
C) undervalued. 
D) risky. 
A) overvalued. 
B) poorly managed. 
C) undervalued. 
D) risky.

Question 11

Which of the following is a limitation of the P/E method?

Accepted Answer

A) Finding the price of the stock 
B) Finding earnings per share information 
C) Difficulty forecasting earnings 
D) Changing dividend payouts 
A) Finding the price of the stock 
B) Finding earnings per share information 
C) Difficulty forecasting earnings 
D) Changing dividend payouts

Question 12

What is the safest type of stock order to use?

Accepted Answer

A) Market order 
B) Limit order 
C) Buy stop order 
D) Sell stop order 
A) Market order 
B) Limit order 
C) Buy stop order 
D) Sell stop order

Question 13

A market in which stock prices fully reflect all information that is available to investors is called

Accepted Answer

A) inefficient. 
B) efficient. 
C) overvalued. 
D) factored. 
A) inefficient. 
B) efficient. 
C) overvalued. 
D) factored.

Question 14

The means by which the Canadian government imposes taxes on individuals and corporations and the way it spends tax revenues is the

Accepted Answer

A) tax policy. 
B) fiscal policy. 
C) monetary policy. 
D) budgetary policy. 
A) tax policy. 
B) fiscal policy. 
C) monetary policy. 
D) budgetary policy.

Question 15

How many shares of TIC could you purchase on margin if you have $6000? The market price is $20 and the margin requirement is 30 percent.

Accepted Answer

A) 900 shares 
B) 300 shares 
C) 1000 shares 
D) 428 shares 
A) 900 shares 
B) 300 shares 
C) 1000 shares 
D) 428 shares

Question 16

You have bought 1000 shares on margin at $50 per share,putting up $25 000.The stock price has increased to $65.If the margin rate is 50 percent,how much more will the broker lend you?

Accepted Answer

A) $0 
B) $15 000 
C) $7500 
D) $5000 
A) $0 
B) $15 000 
C) $7500 
D) $5000

Question 17

Which of the following is not a typical way to analyze firm-specific characteristics through financial statements?

Accepted Answer

A) Profitability 
B) Efficiency 
C) Liquidity 
D) Competitive strategy 
A) Profitability 
B) Efficiency 
C) Liquidity 
D) Competitive strategy

Question 18

What is the appropriate time for someone to invest in the stock market and when should the investment be moved to safer vehicles? Do you believe you have enough knowledge to invest in the stock market? Why or why not? How would you assess your success?

Accepted Answer

These chapters are fairly comprehensive

Question 19

Discuss investing on margin,illustrating the positives and negatives of this investing technique.Illustrate with a specific example.

Accepted Answer

Investing on margin increases risk due t

Question 20

A high times-interest-earned ratio means that the firm should be more capable of covering its debt payments.

Accepted Answer

A) True 
 B)False

If John executes a buy order to take place when the stock price of ABC Ltd.falls to $10,it is a(n)

A firm with a low debt ratio relative to the industry norm has a high degree of financial leverage and therefore may have a relatively high risk of default.

You purchased stock worth $10 000 on margin (50 percent).Now the value of your stock has declined to $7000 and you receive a margin call.How much cash do you need to bring the margin back to the minimum level?

What can be said about broker and analyst recommendations?

How much should a share of stock be worth for a firm whose earnings per share are $4 if the industry's average P/E is 11?

In fundamental research you look for a stock that is

A firm's financial leverage indicates its reliance on debt to support its operations.

If you need to be sure to buy shares of a company when the price rises above a certain level,you need to use a

Inflation is the measure of the increase in the general level of prices of products and services over a specified period.

If a company's P/E is 20 and its industry's mean P/E is 15,the company is considered to be

Which of the following is a limitation of the P/E method?

What is the safest type of stock order to use?

A market in which stock prices fully reflect all information that is available to investors is called

The means by which the Canadian government imposes taxes on individuals and corporations and the way it spends tax revenues is the

How many shares of TIC could you purchase on margin if you have $6000? The market price is $20 and the margin requirement is 30 percent.

You have bought 1000 shares on margin at $50 per share,putting up $25 000.The stock price has increased to $65.If the margin rate is 50 percent,how much more will the broker lend you?

Which of the following is not a typical way to analyze firm-specific characteristics through financial statements?

What is the appropriate time for someone to invest in the stock market and when should the investment be moved to safer vehicles? Do you believe you have enough knowledge to invest in the stock market? Why or why not? How would you assess your success?

Discuss investing on margin,illustrating the positives and negatives of this investing technique.Illustrate with a specific example.

A high times-interest-earned ratio means that the firm should be more capable of covering its debt payments.

Overview of a Financial Plan

Tools for Financial Planning - Applying Time Value Concepts

Tools for Financial Planning - Planning with Personal Financial Statements

Tools for Financial Planning - Using Tax Concepts for Planning

Managing Your Financial Resources - Banking Services and Managing Your Money

Managing Your Financial Resources - Assessing, Managing, and Securing Your Credit

Managing Your Financial Resources - Purchasing and Financing a Home

Protecting Your Wealth - Auto and Homeowner's Insurance

Protecting Your Wealth - Health and Life Insurance

Personal Investing - Investing Fundamentals

Personal Investing - Investing in Bonds

Personal Investing - Investing in Mutual Funds

Retirement and Estate Planning - Retirement Planning

Retirement and Estate Planning - Estate Planning

Synthesis of Financial Planning - Integrating the Components of a Financial Plan

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Exam 11: Personal Investing - Investing in Stocks

If John executes a buy order to take place when the stock price of ABC Ltd.falls to $10,it is a(n)

A firm with a low debt ratio relative to the industry norm has a high degree of financial leverage and therefore may have a relatively high risk of default.

You purchased stock worth $10 000 on margin (50 percent).Now the value of your stock has declined to $7000 and you receive a margin call.How much cash do you need to bring the margin back to the minimum level?

What can be said about broker and analyst recommendations?

How much should a share of stock be worth for a firm whose earnings per share are $4 if the industry's average P/E is 11?

In fundamental research you look for a stock that is

A firm's financial leverage indicates its reliance on debt to support its operations.

If you need to be sure to buy shares of a company when the price rises above a certain level,you need to use a

Inflation is the measure of the increase in the general level of prices of products and services over a specified period.

If a company's P/E is 20 and its industry's mean P/E is 15,the company is considered to be

Which of the following is a limitation of the P/E method?

What is the safest type of stock order to use?

A market in which stock prices fully reflect all information that is available to investors is called

The means by which the Canadian government imposes taxes on individuals and corporations and the way it spends tax revenues is the

How many shares of TIC could you purchase on margin if you have $6000? The market price is $20 and the margin requirement is 30 percent.

You have bought 1000 shares on margin at $50 per share,putting up $25 000.The stock price has increased to $65.If the margin rate is 50 percent,how much more will the broker lend you?

Which of the following is not a typical way to analyze firm-specific characteristics through financial statements?

What is the appropriate time for someone to invest in the stock market and when should the investment be moved to safer vehicles? Do you believe you have enough knowledge to invest in the stock market? Why or why not? How would you assess your success?

Discuss investing on margin,illustrating the positives and negatives of this investing technique.Illustrate with a specific example.

A high times-interest-earned ratio means that the firm should be more capable of covering its debt payments.

Overview of a Financial Plan

Tools for Financial Planning - Applying Time Value Concepts

Tools for Financial Planning - Planning with Personal Financial Statements

Tools for Financial Planning - Using Tax Concepts for Planning

Managing Your Financial Resources - Banking Services and Managing Your Money

Managing Your Financial Resources - Assessing, Managing, and Securing Your Credit

Managing Your Financial Resources - Purchasing and Financing a Home

Protecting Your Wealth - Auto and Homeowner's Insurance

Protecting Your Wealth - Health and Life Insurance

Personal Investing - Investing Fundamentals

Personal Investing - Investing in Bonds

Personal Investing - Investing in Mutual Funds

Retirement and Estate Planning - Retirement Planning

Retirement and Estate Planning - Estate Planning

Synthesis of Financial Planning - Integrating the Components of a Financial Plan

Filters