Question 1

A corporate bond rated AAA is a safer investment than a corporate bond rated BBB.

Accepted Answer

A) True 
 B)False

Question 2

A stock split is generally viewed by investors as an indicator that management expects better profits in the years ahead.

Accepted Answer

A) True 
 B)False

Question 3

The interest earned on a ____ will equal the inflation rate plus a fixed assigned rate of return.

Accepted Answer

A) revenue bond 
B) tax-exempt bond 
C) Treasury bill 
D) I-bonds 
A) revenue bond 
B) tax-exempt bond 
C) Treasury bill 
D) I-bonds

Question 4

The firms that serve as intermediaries in selling newly issued securities are called ____ firms.

Accepted Answer

A) investment banking 
B) insurance underwriting 
C) brokerage 
D) commercial banking 
A) investment banking 
B) insurance underwriting 
C) brokerage 
D) commercial banking

Question 5

Long-term gains are taxed at special rates.

Accepted Answer

A) True 
 B)False

Question 6

The PEG ratio adjusts the P/E ratio to allow for the fact that a company may be experiencing rapid growth.

Accepted Answer

A) True 
 B)False

Question 7

When a bond indenture requires that money be set aside annually to repay the bond,the bond

Accepted Answer

A) has a sinking fund. 
B) is a senior bond. 
C) is a serial bond. 
D) is callable. 
A) has a sinking fund. 
B) is a senior bond. 
C) is a serial bond. 
D) is callable.

Question 8

Most investors own common stocks because their expected return over time can average ______ percent from the combination of dividends and capital gains.

Accepted Answer

A) 3 
B) 6 
C) 9 
D) 12 
A) 3 
B) 6 
C) 9 
D) 12

Question 9

The NASDAQ Composite Index provides a measure of the stock prices in the over-the-counter market.

Accepted Answer

A) True 
 B)False

Question 10

The current yield equals the bond's fixed annual interest payment multiplied by its bond price.

Accepted Answer

A) True 
 B)False

Question 11

MIN Corporation stock is currently selling for $52 a share,and it pays a quarterly dividend of $0.75.What is the dividend yield on MIN Corporation?

Accepted Answer

A) 4.4 percent 
B) 33 percent 
C) 5.8 percent 
D) 1.4 percent 
A) 4.4 percent 
B) 33 percent 
C) 5.8 percent 
D) 1.4 percent

Question 12

Rosa Corporation's board of directors is concerned about the market price of each share of stock.They believe that the shares would be more marketable if the market price was closer to $18 a share.They should initiate a ____ split.

Accepted Answer

A) two-for-one stock 
B) three-for-one stock 
C) two-for-one reverse stock 
D) three-for-one reverse stock 
A) two-for-one stock 
B) three-for-one stock 
C) two-for-one reverse stock 
D) three-for-one reverse stock

Question 13

On the over-the-counter market,prices are negotiated rather than matched.

Accepted Answer

A) True 
 B)False

Question 14

Which is not a characteristic of bonds?

Accepted Answer

A) Par value 
B) Dividend yield 
C) Coupon 
D) Maturity date 
A) Par value 
B) Dividend yield 
C) Coupon 
D) Maturity date

Question 15

Buying cyclical stocks is a defensive investment move

Accepted Answer

A) True 
 B)False

Question 16

A bond that allows the issuer to redeem the bond prior to maturity is said to be

Accepted Answer

A) a debenture. 
B) an indenture. 
C) callable. 
D) open-ended. 
A) a debenture. 
B) an indenture. 
C) callable. 
D) open-ended.

Question 17

____ are sold on a discount basis with the gain at maturity representing the interest earned.

Accepted Answer

A) Treasury bills 
B) Treasury notes 
C) Treasury bonds 
D) Federal agency bonds 
A) Treasury bills 
B) Treasury notes 
C) Treasury bonds 
D) Federal agency bonds

Question 18

Common stock owners typically expect to make money on stocks by receiving

Accepted Answer

A) interest and dividends. 
B) interest and capital gains. 
C) dividends and capital gains. 
D) dividends and rent income. 
A) interest and dividends. 
B) interest and capital gains. 
C) dividends and capital gains. 
D) dividends and rent income.

Question 19

Use the following stock listing for transactions on December 12 to answer the questions:
  
-What was QPZ's closing price on December 11?

Accepted Answer

A) $45.00 per share 
B) $44.25 per share 
C) $44.25 per share. 
D) $43.38 per share 
A) $45.00 per share 
B) $44.25 per share 
C) $44.25 per share. 
D) $43.38 per share

Question 20

Hill Country Pools,Inc.,had after-tax earnings of $750,000 and paid out dividends of $325,000.There are 275,000 shares of Hill Country Pools common stock outstanding with a current market value of $27 a share and no preferred stock.What is the dividend payout ratio for this company?

Accepted Answer

A) 85 percent 
B) 43 percent 
C) 37 percent 
D) 10 percent 
A) 85 percent 
B) 43 percent 
C) 37 percent 
D) 10 percent

A corporate bond rated AAA is a safer investment than a corporate bond rated BBB.

A stock split is generally viewed by investors as an indicator that management expects better profits in the years ahead.

The interest earned on a ____ will equal the inflation rate plus a fixed assigned rate of return.

The firms that serve as intermediaries in selling newly issued securities are called ____ firms.

Long-term gains are taxed at special rates.

The PEG ratio adjusts the P/E ratio to allow for the fact that a company may be experiencing rapid growth.

When a bond indenture requires that money be set aside annually to repay the bond,the bond

Most investors own common stocks because their expected return over time can average ______ percent from the combination of dividends and capital gains.

The NASDAQ Composite Index provides a measure of the stock prices in the over-the-counter market.

The current yield equals the bond's fixed annual interest payment multiplied by its bond price.

MIN Corporation stock is currently selling for $52 a share,and it pays a quarterly dividend of $0.75.What is the dividend yield on MIN Corporation?

Rosa Corporation's board of directors is concerned about the market price of each share of stock.They believe that the shares would be more marketable if the market price was closer to $18 a share.They should initiate a ____ split.

On the over-the-counter market,prices are negotiated rather than matched.

Which is not a characteristic of bonds?

Buying cyclical stocks is a defensive investment move

A bond that allows the issuer to redeem the bond prior to maturity is said to be

____ are sold on a discount basis with the gain at maturity representing the interest earned.

Common stock owners typically expect to make money on stocks by receiving

Use the following stock listing for transactions on December 12 to answer the questions: -What was QPZ's closing price on December 11?

Hill Country Pools,Inc.,had after-tax earnings of $750,000 and paid out dividends of $325,000.There are 275,000 shares of Hill Country Pools common stock outstanding with a current market value of $27 a share and no preferred stock.What is the dividend payout ratio for this company?

Understanding Personal Finance

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Financial Statements,tools,and Budgets

Managing Income Taxes

Managing Checking and Savings Accounts

Building and Maintaining Good Credit

Credit Cards and Consumer Loans

Vehicles and Other Major Purchases

Obtaining Affordable Housing

Managing Property and Liability Risk

Managing Health Expenses

Life Insurance Planning

Investment Fundamentals

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Exam 14: Investing in Stocks and Bonds

A corporate bond rated AAA is a safer investment than a corporate bond rated BBB.

A stock split is generally viewed by investors as an indicator that management expects better profits in the years ahead.

The interest earned on a ____ will equal the inflation rate plus a fixed assigned rate of return.

The firms that serve as intermediaries in selling newly issued securities are called ____ firms.

Long-term gains are taxed at special rates.

The PEG ratio adjusts the P/E ratio to allow for the fact that a company may be experiencing rapid growth.

When a bond indenture requires that money be set aside annually to repay the bond,the bond

Most investors own common stocks because their expected return over time can average ______ percent from the combination of dividends and capital gains.

The NASDAQ Composite Index provides a measure of the stock prices in the over-the-counter market.

The current yield equals the bond's fixed annual interest payment multiplied by its bond price.

MIN Corporation stock is currently selling for $52 a share,and it pays a quarterly dividend of $0.75.What is the dividend yield on MIN Corporation?

Rosa Corporation's board of directors is concerned about the market price of each share of stock.They believe that the shares would be more marketable if the market price was closer to $18 a share.They should initiate a ____ split.

On the over-the-counter market,prices are negotiated rather than matched.

Which is not a characteristic of bonds?

Buying cyclical stocks is a defensive investment move

A bond that allows the issuer to redeem the bond prior to maturity is said to be

____ are sold on a discount basis with the gain at maturity representing the interest earned.

Common stock owners typically expect to make money on stocks by receiving

Use the following stock listing for transactions on December 12 to answer the questions: -What was QPZ's closing price on December 11?

Hill Country Pools,Inc.,had after-tax earnings of $750,000 and paid out dividends of $325,000.There are 275,000 shares of Hill Country Pools common stock outstanding with a current market value of $27 a share and no preferred stock.What is the dividend payout ratio for this company?

Understanding Personal Finance

Career Planning

Financial Statements,tools,and Budgets

Managing Income Taxes

Managing Checking and Savings Accounts

Building and Maintaining Good Credit

Credit Cards and Consumer Loans

Vehicles and Other Major Purchases

Obtaining Affordable Housing

Managing Property and Liability Risk

Managing Health Expenses

Life Insurance Planning

Investment Fundamentals

Mutual Funds and Exchange Traded Funds

Real Estate and High-Risk Investments

Retirement and Estate Planning

Filters