Question 1

A stock currently selling for $105 with estimated earnings per share of $5.25 would have a P/E ratio of

Accepted Answer

A)  10. 
B)  12. 
C)  20. 
D)  28. 
E)  30. 
A)  10. 
B)  12. 
C)  20. 
D)  28. 
E)  30.

Question 2

What would you expect to be associated with a company whose stock has a high beta?

Accepted Answer

A)  A high potential return 
B)  A high dividend yield 
C)  A large market capitalization 
D)  All of the above are correct. 
E)  All but C are correct. 
A)  A high potential return 
B)  A high dividend yield 
C)  A large market capitalization 
D)  All of the above are correct. 
E)  All but C are correct.

Question 3

Dividends

Accepted Answer

A)  are always paid, regardless of the company's profitability. 
B)  are always paid when the company makes a profit. 
C)  are never paid to common stockholders; only preferred stockholders receive them. 
D)  None of the above is true. 
A)  are always paid, regardless of the company's profitability. 
B)  are always paid when the company makes a profit. 
C)  are never paid to common stockholders; only preferred stockholders receive them. 
D)  None of the above is true.

Question 4

If you wanted information about how the entire stock market is performing,which index would provide you with information on virtually all types and sizes of companies?

Accepted Answer

A)  Dow Jones Industrials 
B)  S&P 500 
C)  NASDAQ 100 
D)  Wilshire 5000 
A)  Dow Jones Industrials 
B)  S&P 500 
C)  NASDAQ 100 
D)  Wilshire 5000

Question 5

The discounted dividends valuation model of common stock assumes that dividends will grow at a constant rate forever.This method tells us that the (dividend next year)divided by the (required rate of return - growth rate)yields the

Accepted Answer

A)  discounted dividend. 
B)  dividend growth rate. 
C)  value of the common stock. 
D)  value of the earnings. 
E)  value of the P/E ratio. 
A)  discounted dividend. 
B)  dividend growth rate. 
C)  value of the common stock. 
D)  value of the earnings. 
E)  value of the P/E ratio.

Question 6

Can you explain the risk-return trade-off with common stocks?

Accepted Answer

Stocks have more risk than other investm

Question 7

Is a positive stock split good for the current share holders?

Accepted Answer

Yes,for the most part a positive stock s

Question 8

You purchased 100 shares of Quantex at $150 per share for a total investment of $15,000.After your purchase the stock had a 3 for 1 split.How many shares do you now own and how much is your original investment now worth?

Accepted Answer

A)  100 shares and $150 dollars 
B)  300 shares and $15,000 dollars 
C)  100 shares and $45,000 dollars 
D)  300 shares and $45,000 dollars 
A)  100 shares and $150 dollars 
B)  300 shares and $15,000 dollars 
C)  100 shares and $45,000 dollars 
D)  300 shares and $45,000 dollars

Question 9

A proxy vote means

Accepted Answer

A)  filling out a voting form and having a representative turn it in for you. 
B)  requesting that your vote be deferred until a later date. 
C)  giving a representative the right to vote in your place. 
D)  none of the above. 
A)  filling out a voting form and having a representative turn it in for you. 
B)  requesting that your vote be deferred until a later date. 
C)  giving a representative the right to vote in your place. 
D)  none of the above.

Question 10

A ________ is a measure of the performance of a group of stocks that represent the market or a sector of the market.

Accepted Answer

A)  stock market index 
B)  stock grouping 
C)  market composite 
D)  portfolio return 
E)  none of the above 
A)  stock market index 
B)  stock grouping 
C)  market composite 
D)  portfolio return 
E)  none of the above

Question 11

The letters or characters that represent a stock is known as the stock's

Accepted Answer

A)  ticker. 
B)  code. 
C)  acronym. 
D)  share. 
A)  ticker. 
B)  code. 
C)  acronym. 
D)  share.

Question 12

Returns on stocks can come in the form of capital appreciation.

Accepted Answer

A) True 
 B)False

Question 13

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 14

The Dow Jones Industrial Average has been an index since what year?

Accepted Answer

A)  1796 
B)  1896 
C)  1996 
D)  2006 
A)  1796 
B)  1896 
C)  1996 
D)  2006

Question 15

The S&P 500

Accepted Answer

A)  is the oldest and most widely quoted of the stock indexes. 
B)  is a narrower index than the DOW. 
C)  includes some stocks from the OTC market. 
D)  all of the above 
A)  is the oldest and most widely quoted of the stock indexes. 
B)  is a narrower index than the DOW. 
C)  includes some stocks from the OTC market. 
D)  all of the above

Question 16

ComChip is a computer chip manufacturer.Its stock is selling at $50 per share and earnings are $2 per share.What is the stock's P/E ratio?

Accepted Answer

A)  50.00 
B)  45.80 
C)  25.00 
D)  27.78 
E)  22.50 
A)  50.00 
B)  45.80 
C)  25.00 
D)  27.78 
E)  22.50

Question 17

All of the following are stock market indexes except

Accepted Answer

A)  the Dow Jones Industrial Average. 
B)  the Standard & Poor's 500. 
C)  the Russell 100. 
D)  the Wilshire 5000. 
A)  the Dow Jones Industrial Average. 
B)  the Standard & Poor's 500. 
C)  the Russell 100. 
D)  the Wilshire 5000.

Question 18

You have just purchased 10 shares of a stock selling at $50 per share.Since that time,the company was found to be in violation of several environmental laws and has several major lawsuits outstanding.Which of the following statements is most correct?

Accepted Answer

A)  You could lose up to your $500 investment. 
B)  You could lose more than your $500 investment. 
C)  You cannot lose your investment based on the actions of the company. 
D)  By owning stock in the company, you have also technically violated the law. 
E)  None of the above 
A)  You could lose up to your $500 investment. 
B)  You could lose more than your $500 investment. 
C)  You cannot lose your investment based on the actions of the company. 
D)  By owning stock in the company, you have also technically violated the law. 
E)  None of the above

Question 19

Stocks reduce risk by portfolio rebalancing.

Accepted Answer

A) True 
 B)False

Question 20

You and a group of your friends have been discussing your portfolios at the company water cooler.Your discussion has centered on how your stocks are moving up or down in price relative to the market as a whole.Each stock's ________ is likely the best measure of the relationship.

Accepted Answer

A)  relative index 
B)  beta 
C)  alpha 
D)  delta 
E)  none of the above 
A)  relative index 
B)  beta 
C)  alpha 
D)  delta 
E)  none of the above

A stock currently selling for $105 with estimated earnings per share of $5.25 would have a P/E ratio of

What would you expect to be associated with a company whose stock has a high beta?

Dividends

If you wanted information about how the entire stock market is performing,which index would provide you with information on virtually all types and sizes of companies?

The discounted dividends valuation model of common stock assumes that dividends will grow at a constant rate forever.This method tells us that the (dividend next year)divided by the (required rate of return - growth rate)yields the

Can you explain the risk-return trade-off with common stocks?

Is a positive stock split good for the current share holders?

You purchased 100 shares of Quantex at $150 per share for a total investment of $15,000.After your purchase the stock had a 3 for 1 split.How many shares do you now own and how much is your original investment now worth?

A proxy vote means

A ________ is a measure of the performance of a group of stocks that represent the market or a sector of the market.

The letters or characters that represent a stock is known as the stock's

Returns on stocks can come in the form of capital appreciation.

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

The Dow Jones Industrial Average has been an index since what year?

The S&P 500

ComChip is a computer chip manufacturer.Its stock is selling at $50 per share and earnings are $2 per share.What is the stock's P/E ratio?

All of the following are stock market indexes except

You have just purchased 10 shares of a stock selling at $50 per share.Since that time,the company was found to be in violation of several environmental laws and has several major lawsuits outstanding.Which of the following statements is most correct?

Stocks reduce risk by portfolio rebalancing.

You and a group of your friends have been discussing your portfolios at the company water cooler.Your discussion has centered on how your stocks are moving up or down in price relative to the market as a whole.Each stock's ________ is likely the best measure of the relationship.

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

Student and Consumer Loans: The Role of Planned Borrowing

The Home and Automobile Decision

Life and Health Insurance

Property and Liability Insurance

Investment Basics

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

Exam 12: Investing in Stocks

A stock currently selling for $105 with estimated earnings per share of $5.25 would have a P/E ratio of

What would you expect to be associated with a company whose stock has a high beta?

Dividends

If you wanted information about how the entire stock market is performing,which index would provide you with information on virtually all types and sizes of companies?

The discounted dividends valuation model of common stock assumes that dividends will grow at a constant rate forever.This method tells us that the (dividend next year)divided by the (required rate of return - growth rate)yields the

Can you explain the risk-return trade-off with common stocks?

Is a positive stock split good for the current share holders?

You purchased 100 shares of Quantex at $150 per share for a total investment of $15,000.After your purchase the stock had a 3 for 1 split.How many shares do you now own and how much is your original investment now worth?

A proxy vote means

A ________ is a measure of the performance of a group of stocks that represent the market or a sector of the market.

The letters or characters that represent a stock is known as the stock's

Returns on stocks can come in the form of capital appreciation.

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

The Dow Jones Industrial Average has been an index since what year?

The S&P 500

ComChip is a computer chip manufacturer.Its stock is selling at $50 per share and earnings are $2 per share.What is the stock's P/E ratio?

All of the following are stock market indexes except

You have just purchased 10 shares of a stock selling at $50 per share.Since that time,the company was found to be in violation of several environmental laws and has several major lawsuits outstanding.Which of the following statements is most correct?

Stocks reduce risk by portfolio rebalancing.

You and a group of your friends have been discussing your portfolios at the company water cooler.Your discussion has centered on how your stocks are moving up or down in price relative to the market as a whole.Each stock's ________ is likely the best measure of the relationship.

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

Student and Consumer Loans: The Role of Planned Borrowing

The Home and Automobile Decision

Life and Health Insurance

Property and Liability Insurance

Investment Basics

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