Question 1

The earnings per share of a stock divided by its market price is its earnings yield.

Accepted Answer

A) True 
 B)False

Question 2

A price-to-book ratio of less than 1 indicates an overvalued company.

Accepted Answer

A) True 
 B)False

Question 3

The lower the payout ratio,the greater the odds that the company's earnings will sustain future dividend payments.

Accepted Answer

A) True 
 B)False

Question 4

Which of the following is true regarding growth stocks?

Accepted Answer

A) They pay above-average cash dividends. 
B) They have relatively low P/E ratios. 
C) They often have betas of 1.5 or more. 
D) Investors are expecting low to moderate appreciation in stock prices. 
A) They pay above-average cash dividends. 
B) They have relatively low P/E ratios. 
C) They often have betas of 1.5 or more. 
D) Investors are expecting low to moderate appreciation in stock prices.

Question 5

The losses of common stockholders are limited to the amount of their investment in the corporation.

Accepted Answer

A) True 
 B)False

Question 6

Utility company stocks are generally classified as income stocks.

Accepted Answer

A) True 
 B)False

Question 7

Beta assesses the investment's relationship to its expected performance.

Accepted Answer

A) True 
 B)False

Question 8

Genie Corporation recently declared a three-for-one stock split.Before the split the stock was worth $100 per share.If you owned 100 shares before the split occurred,you now own ____ shares worth approximately ____ per share.

Accepted Answer

A) 200; $33 
B) 200; $50 
C) 300; $50 
D) 300; $33 
A) 200; $33 
B) 200; $50 
C) 300; $50 
D) 300; $33

Question 9

Rosa's is a small chain of Mexican food restaurants that features five delicious varieties of salsa. The business has grown over the past ten years from a hobby to a small corporation with 200,000 shares of common stock outstanding. The corporation has not issued any preferred stock. The following is Rosa's latest financial data:
  
-What is the dividend payout ratio for Rosa's?

Accepted Answer

A) 0.08 
B) 0.13 
C) 0.27 
D) 0.43 
A) 0.08 
B) 0.13 
C) 0.27 
D) 0.43

Question 10

Large-cap stocks are the stocks of companies that are quite substantial in terms of capitalization,around $750 million to $3 billion in size.

Accepted Answer

A) True 
 B)False

Question 11

Brokerage commissions are charged

Accepted Answer

A) annually. 
B) when stock is purchased. 
C) when stock is sold. 
D) both when stock is purchased and when stock is sold. 
A) annually. 
B) when stock is purchased. 
C) when stock is sold. 
D) both when stock is purchased and when stock is sold.

Question 12

A market order and a limit order are orders to ____,while a stop order is an order to ____.

Accepted Answer

A) buy; sell 
B) buy or sell; buy 
C) buy or sell; sell 
D) sell; buy 
A) buy; sell 
B) buy or sell; buy 
C) buy or sell; sell 
D) sell; buy

Question 13

A stock's book value usually exceeds its market price per share.

Accepted Answer

A) True 
 B)False

Question 14

The shortest-term Treasury issue is called a

Accepted Answer

A) U.S. Series EE savings bond. 
B) Treasury bond. 
C) Treasury bill. 
D) Treasury note. 
A) U.S. Series EE savings bond. 
B) Treasury bond. 
C) Treasury bill. 
D) Treasury note.

Question 15

____ would be classified as a countercyclical industry.

Accepted Answer

A) Airlines 
B) Hotels 
C) Tobacco 
D) Autos 
A) Airlines 
B) Hotels 
C) Tobacco 
D) Autos

Question 16

Microcaps are firms with less than $100 million in capitalization.

Accepted Answer

A) True 
 B)False

Question 17

The price/earnings ratio tells how much investors are willing to pay for future earnings.

Accepted Answer

A) True 
 B)False

Question 18

Market making occurs when a broker or dealer attempts to provide a continuous market by maintaining an inventory of specific securities to sell to other brokerage firms and stands ready to buy reasonable quantities of the same securities at market prices.

Accepted Answer

A) True 
 B)False

Question 19

Which of the following is not an external regulator of stock brokerage houses and stock exchanges?

Accepted Answer

A) FINRA 
B) SEC 
C) a brokerage firm 
D) SIPC 
A) FINRA 
B) SEC 
C) a brokerage firm 
D) SIPC

Question 20

A company gives an employee the right and opportunity to exercise the option of an ESO by buying the stock sometime in the future at a ____ price established when the option was given.

Accepted Answer

A) striking 
B) startup 
C) principal 
D) retained 
A) striking 
B) startup 
C) principal 
D) retained

The earnings per share of a stock divided by its market price is its earnings yield.

A price-to-book ratio of less than 1 indicates an overvalued company.

The lower the payout ratio,the greater the odds that the company's earnings will sustain future dividend payments.

Which of the following is true regarding growth stocks?

The losses of common stockholders are limited to the amount of their investment in the corporation.

Utility company stocks are generally classified as income stocks.

Beta assesses the investment's relationship to its expected performance.

Genie Corporation recently declared a three-for-one stock split.Before the split the stock was worth $100 per share.If you owned 100 shares before the split occurred,you now own shares worth approximately per share.

Large-cap stocks are the stocks of companies that are quite substantial in terms of capitalization,around $750 million to $3 billion in size.

Brokerage commissions are charged

A market order and a limit order are orders to ,while a stop order is an order to .

A stock's book value usually exceeds its market price per share.

The shortest-term Treasury issue is called a

____ would be classified as a countercyclical industry.

Microcaps are firms with less than $100 million in capitalization.

The price/earnings ratio tells how much investors are willing to pay for future earnings.

Market making occurs when a broker or dealer attempts to provide a continuous market by maintaining an inventory of specific securities to sell to other brokerage firms and stands ready to buy reasonable quantities of the same securities at market prices.

Which of the following is not an external regulator of stock brokerage houses and stock exchanges?

A company gives an employee the right and opportunity to exercise the option of an ESO by buying the stock sometime in the future at a ____ price established when the option was given.

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

Exam 14: Investing in Stocks and Bonds

The earnings per share of a stock divided by its market price is its earnings yield.

A price-to-book ratio of less than 1 indicates an overvalued company.

The lower the payout ratio,the greater the odds that the company's earnings will sustain future dividend payments.

Which of the following is true regarding growth stocks?

The losses of common stockholders are limited to the amount of their investment in the corporation.

Utility company stocks are generally classified as income stocks.

Beta assesses the investment's relationship to its expected performance.

Genie Corporation recently declared a three-for-one stock split.Before the split the stock was worth $100 per share.If you owned 100 shares before the split occurred,you now own ____ shares worth approximately ____ per share.

Large-cap stocks are the stocks of companies that are quite substantial in terms of capitalization,around $750 million to $3 billion in size.

Brokerage commissions are charged

A market order and a limit order are orders to ____,while a stop order is an order to ____.

A stock's book value usually exceeds its market price per share.

The shortest-term Treasury issue is called a

____ would be classified as a countercyclical industry.

Microcaps are firms with less than $100 million in capitalization.

The price/earnings ratio tells how much investors are willing to pay for future earnings.

Market making occurs when a broker or dealer attempts to provide a continuous market by maintaining an inventory of specific securities to sell to other brokerage firms and stands ready to buy reasonable quantities of the same securities at market prices.

Which of the following is not an external regulator of stock brokerage houses and stock exchanges?

A company gives an employee the right and opportunity to exercise the option of an ESO by buying the stock sometime in the future at a ____ price established when the option was given.

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

Genie Corporation recently declared a three-for-one stock split.Before the split the stock was worth $100 per share.If you owned 100 shares before the split occurred,you now own shares worth approximately per share.

A market order and a limit order are orders to ,while a stop order is an order to .