Exam 14: Investing in Stocks and Bonds

The bid price is the lowest price anyone will accept at the time for a particular security.

Indentures that allow the issuer to repurchase the bond at par value or by paying a premium are known as a call option.

Sally is in the 15 percent marginal tax bracket,Ben is in the 25 percent marginal tax bracket,and Julie is in the 28 percent marginal tax bracket.On the basis of only this information,a municipal bond investment would be most attractive to

A stock with a beta that is less than 1.0 or even a negative beta is called a defensive stock.

U.S.Government TIPS bonds guarantee that the investor's return will outpace inflation.

A bond is most likely to be called when interest rates in the economy have risen.

____ is (are) tax deductible for businesses.

A bond is an interest-bearing negotiable certificate of long-term debt issued by

A shareholder is also called a stockholder.

Common stock holders have ____ in the income and assets of a corporation after preferred stockholders and bond holders.

When one of the major bond-rating services downgrades a bond rating,the market price of that bond generally falls.

What type of investor believes that the market isn't always efficient and that it is possible to find companies that are trading for less than they are worth?

The Dow Jones Industrial Average is the most widely reported of all indexes.

Buying a security with the hope that it will go up in value is called buying long.

The lower the price-to-sales ratio,the better the marketability of a stock.

Which of the following types of companies would tend to have the lowest P/E ratio?

Any after-tax profit a company earns but does not pay out as dividends is called its retained earnings.

____ are not sold at a discount by the issuer.

A stock with a positive alpha statistic means the fund did better than expected for its level of risk.

____ accounts allow the investor to purchase stock with funds borrowed from the brokerage firm.