Question 1

An order to execute a transaction to buy or sell a stock at its prevailing price is called a

Accepted Answer

A) limit order. 
B) stock order. 
C) market order. 
D) good till cancelled order. 
A) limit order. 
B) stock order. 
C) market order. 
D) good till cancelled order.

Question 2

Fiscal policy is about how the government manages interest rates and money supply.

Accepted Answer

A) True 
 B)False

Question 3

If IIROC limits the margin on a stock to 70 percent,initially how much money would you need to personally invest to purchase $10 000 worth of BMO stock?

Accepted Answer

A) $7000 
B) $3000 
C) It depends on the price 
D) $10 000 
A) $7000 
B) $3000 
C) It depends on the price 
D) $10 000

Question 4

The Investment Industry Regulatory Organization of Canada (IIROC)limits the amount that can be borrowed for a TSX list stock to 70 percent for stocks that trade for more than $5 per share.

Accepted Answer

A) True 
 B)False

Question 5

The price-earnings method used to value stock is limited because it assumes that the firm has the same P/E ratio as its competitors.

Accepted Answer

A) True 
 B)False

Question 6

A company's earnings are $3 per share,its dividend is $2 per share,and its stock price is $30 per share.Its P/E is

Accepted Answer

A) 15. 
B) 10. 
C) 6) 
D) 15 percent. 
A) 15. 
B) 10. 
C) 6) 
D) 15 percent.

Question 7

As long as you purchase the stock of a good company,it will be a good investment.

Accepted Answer

A) True 
 B)False

Question 8

One study tracked recommendations by stockbrokers and showed that they make "buy" recommendations hundreds of times more often than "sell" recommendations.

Accepted Answer

A) True 
 B)False

Question 9

One of the most commonly used measures of inflation is the

Accepted Answer

A) gross domestic product. 
B) fiscal policy. 
C) consumer price index. 
D) inflation factor. 
A) gross domestic product. 
B) fiscal policy. 
C) consumer price index. 
D) inflation factor.

Question 10

The Toronto Stock Exchange (TSX)is the only Canadian stock exchange.

Accepted Answer

A) True 
 B)False

Question 11

In deciding to invest in stocks,the most time-consuming part is

Accepted Answer

A) fundamental analysis. 
B) choosing a broker. 
C) the actual purchase of the stock. 
D) monitoring results. 
A) fundamental analysis. 
B) choosing a broker. 
C) the actual purchase of the stock. 
D) monitoring results.

Question 12

A brokerage firm currently limits the margin rate to 70 percent.The amount that can be borrowed for a transaction to buy 100 shares at $50 is

Accepted Answer

A) $4000. 
B) $3500. 
C) $5000. 
D) $1500. 
A) $4000. 
B) $3500. 
C) $5000. 
D) $1500.

Question 13

A discount brokerage firm executes transactions and provides investment advice at a price less than that of full-service brokers.

Accepted Answer

A) True 
 B)False

Question 14

Limit orders are very specialized and rarely used by investors.

Accepted Answer

A) True 
 B)False

Question 15

When you buy a stock on margin,your return is magnified if the stock goes up in value.

Accepted Answer

A) True 
 B)False

Question 16

A stock with a low P/E ratio compared with its peers means it is a good value using fundamental analysis.

Accepted Answer

A) True 
 B)False

Question 17

The TSX Index had a return of 12 percent and Apple Inc.had a return of two percent over the same six month period.What can you say about whether your purchase of Apple Inc.was a good decision?

Accepted Answer

A) Nothing because the TSX Index is not a relevant comparison for an American company. 
B) Your analysis of Apple was poor. 
C) Apple is always a good company to buy,but this was too short a time to compare. 
D) Comparing returns with an Index is irrelevant. 
A) Nothing because the TSX Index is not a relevant comparison for an American company. 
B) Your analysis of Apple was poor. 
C) Apple is always a good company to buy,but this was too short a time to compare. 
D) Comparing returns with an Index is irrelevant.

Question 18

Floor traders no longer exist on the TSX because trades are now handled electronically.

Accepted Answer

A) True 
 B)False

Question 19

If stock markets are truly efficient,it implies that

Accepted Answer

A) it will not be easy to find undervalued stocks. 
B) technical analysis should be more effective than fundamental analysis. 
C) professional money managers should outperform individual investors. 
D) stock purchase and sell orders can always be completed within a number of seconds. 
A) it will not be easy to find undervalued stocks. 
B) technical analysis should be more effective than fundamental analysis. 
C) professional money managers should outperform individual investors. 
D) stock purchase and sell orders can always be completed within a number of seconds.

Question 20

The risk of a market order is that you could pay more for a stock than you anticipated.

Accepted Answer

A) True 
 B)False

An order to execute a transaction to buy or sell a stock at its prevailing price is called a

Fiscal policy is about how the government manages interest rates and money supply.

If IIROC limits the margin on a stock to 70 percent,initially how much money would you need to personally invest to purchase $10 000 worth of BMO stock?

The Investment Industry Regulatory Organization of Canada (IIROC)limits the amount that can be borrowed for a TSX list stock to 70 percent for stocks that trade for more than $5 per share.

The price-earnings method used to value stock is limited because it assumes that the firm has the same P/E ratio as its competitors.

A company's earnings are $3 per share,its dividend is $2 per share,and its stock price is $30 per share.Its P/E is

As long as you purchase the stock of a good company,it will be a good investment.

One study tracked recommendations by stockbrokers and showed that they make "buy" recommendations hundreds of times more often than "sell" recommendations.

One of the most commonly used measures of inflation is the

The Toronto Stock Exchange (TSX)is the only Canadian stock exchange.

In deciding to invest in stocks,the most time-consuming part is

A brokerage firm currently limits the margin rate to 70 percent.The amount that can be borrowed for a transaction to buy 100 shares at $50 is

A discount brokerage firm executes transactions and provides investment advice at a price less than that of full-service brokers.

Limit orders are very specialized and rarely used by investors.

When you buy a stock on margin,your return is magnified if the stock goes up in value.

A stock with a low P/E ratio compared with its peers means it is a good value using fundamental analysis.

The TSX Index had a return of 12 percent and Apple Inc.had a return of two percent over the same six month period.What can you say about whether your purchase of Apple Inc.was a good decision?

Floor traders no longer exist on the TSX because trades are now handled electronically.

If stock markets are truly efficient,it implies that

The risk of a market order is that you could pay more for a stock than you anticipated.

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

An order to execute a transaction to buy or sell a stock at its prevailing price is called a

Fiscal policy is about how the government manages interest rates and money supply.

If IIROC limits the margin on a stock to 70 percent,initially how much money would you need to personally invest to purchase $10 000 worth of BMO stock?

The Investment Industry Regulatory Organization of Canada (IIROC)limits the amount that can be borrowed for a TSX list stock to 70 percent for stocks that trade for more than $5 per share.

The price-earnings method used to value stock is limited because it assumes that the firm has the same P/E ratio as its competitors.

A company's earnings are $3 per share,its dividend is $2 per share,and its stock price is $30 per share.Its P/E is

As long as you purchase the stock of a good company,it will be a good investment.

One study tracked recommendations by stockbrokers and showed that they make "buy" recommendations hundreds of times more often than "sell" recommendations.

One of the most commonly used measures of inflation is the

The Toronto Stock Exchange (TSX)is the only Canadian stock exchange.

In deciding to invest in stocks,the most time-consuming part is

A brokerage firm currently limits the margin rate to 70 percent.The amount that can be borrowed for a transaction to buy 100 shares at $50 is

A discount brokerage firm executes transactions and provides investment advice at a price less than that of full-service brokers.

Limit orders are very specialized and rarely used by investors.

When you buy a stock on margin,your return is magnified if the stock goes up in value.

A stock with a low P/E ratio compared with its peers means it is a good value using fundamental analysis.

The TSX Index had a return of 12 percent and Apple Inc.had a return of two percent over the same six month period.What can you say about whether your purchase of Apple Inc.was a good decision?

Floor traders no longer exist on the TSX because trades are now handled electronically.

If stock markets are truly efficient,it implies that

The risk of a market order is that you could pay more for a stock than you anticipated.

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