Question 1

Bonds are usually issued in denominations of $1,000.

Accepted Answer

A) True 
 B)False

Question 2

Interest income is generally received semiannually on zero-coupon bonds.

Accepted Answer

A) True 
 B)False

Question 3

The term coupon yield refers to the interest rate printed on the bond certificate.

Accepted Answer

A) True 
 B)False

Question 4

MAX Corporation stock is currently selling for $38 a share,and it pays a quarterly dividend of $0.25.What is the dividend yield on MAX Corporation?

Accepted Answer

A) 1.0 percent 
B) 2.6 percent 
C) 3.3 percent 
D) 6.5 percent 
A) 1.0 percent 
B) 2.6 percent 
C) 3.3 percent 
D) 6.5 percent

Question 5

A stock or mutual fund with a ____ beta means the security goes up when the market as a whole goes up average  when the market is rising ; a ____ beta indicates the opposite.

Accepted Answer

A) positive; negative 
B) negative; positive 
C) zero; negative 
D) positive; zero 
A) positive; negative 
B) negative; positive 
C) zero; negative 
D) positive; zero

Question 6

Stocks with low price/earnings ratios tend to have

Accepted Answer

A) lower yields. 
B) higher risk. 
C) higher prices. 
D) a slower earnings growth rate. 
A) lower yields. 
B) higher risk. 
C) higher prices. 
D) a slower earnings growth rate.

Question 7

Preferred stock that pays the stockholder previously skipped dividends before the common stockholders can be paid any dividends is called ____ preferred stock.

Accepted Answer

A) cumulative 
B) callable 
C) participating 
D) convertible 
A) cumulative 
B) callable 
C) participating 
D) convertible

Question 8

Current shareholders generally have the right to buy additional shares in the company before new shares of the company's stock are offered to the public.This is called ____ rights.

Accepted Answer

A) pre-emptive 
B) retained 
C) callable 
D) convertibility 
A) pre-emptive 
B) retained 
C) callable 
D) convertibility

Question 9

The default rate on high-quality bonds is less than 1 percent,whereas the default rate on junk bonds ranges from 8 to 12 percent.

Accepted Answer

A) True 
 B)False

Question 10

When a bond is first issued,it is sold at

Accepted Answer

A) face value. 
B) discount. 
C) premium. 
D) any of these. 
A) face value. 
B) discount. 
C) premium. 
D) any of these.

Question 11

Generally the smaller the value of a stock transaction,the higher the percentage commission charged on the transaction.

Accepted Answer

A) True 
 B)False

Question 12

All interest received on a zero-coupon bond is taxed in the year of maturity.

Accepted Answer

A) True 
 B)False

Question 13

In the case of noncumulative preferred stock,the preferred stockholders would have a claim to previously skipped dividends.

Accepted Answer

A) True 
 B)False

Question 14

Which of the following sources of information about a corporation and its profitability is issued most frequently?

Accepted Answer

A) 10-Q 
B) 10-K 
C) annual report 
D) prospectus 
A) 10-Q 
B) 10-K 
C) annual report 
D) prospectus

Question 15

A new issuance of stocks is called a(n).

Accepted Answer

A) pre-emptive sale. 
B) initial public offering. 
C) preferred sale. 
D) proxy. 
A) pre-emptive sale. 
B) initial public offering. 
C) preferred sale. 
D) proxy.

Question 16

When interest rates are low,buy bonds.

Accepted Answer

A) True 
 B)False

Question 17

The money left over after a company pays its expenses and interest to bondholders is called profit.

Accepted Answer

A) True 
 B)False

Question 18

The most widely reported security market index is the

Accepted Answer

A) Standard & Poor's 500. 
B) Dow Jones Industrial Average. 
C) New York Stock Exchange Index. 
D) Nikkei Dow. 
A) Standard & Poor's 500. 
B) Dow Jones Industrial Average. 
C) New York Stock Exchange Index. 
D) Nikkei Dow.

Question 19

Betas are used to measure the risk of a security relative to the overall market.

Accepted Answer

A) True 
 B)False

Question 20

Pre-emptive rights enable stockholders to purchase additional shares before new shares are offered to the public.

Accepted Answer

A) True 
 B)False

Bonds are usually issued in denominations of $1,000.

Interest income is generally received semiannually on zero-coupon bonds.

The term coupon yield refers to the interest rate printed on the bond certificate.

MAX Corporation stock is currently selling for $38 a share,and it pays a quarterly dividend of $0.25.What is the dividend yield on MAX Corporation?

A stock or mutual fund with a beta means the security goes up when the market as a whole goes up average when the market is rising ; a beta indicates the opposite.

Stocks with low price/earnings ratios tend to have

Preferred stock that pays the stockholder previously skipped dividends before the common stockholders can be paid any dividends is called ____ preferred stock.

Current shareholders generally have the right to buy additional shares in the company before new shares of the company's stock are offered to the public.This is called ____ rights.

The default rate on high-quality bonds is less than 1 percent,whereas the default rate on junk bonds ranges from 8 to 12 percent.

When a bond is first issued,it is sold at

Generally the smaller the value of a stock transaction,the higher the percentage commission charged on the transaction.

All interest received on a zero-coupon bond is taxed in the year of maturity.

In the case of noncumulative preferred stock,the preferred stockholders would have a claim to previously skipped dividends.

Which of the following sources of information about a corporation and its profitability is issued most frequently?

A new issuance of stocks is called a(n).

When interest rates are low,buy bonds.

The money left over after a company pays its expenses and interest to bondholders is called profit.

The most widely reported security market index is the

Betas are used to measure the risk of a security relative to the overall market.

Pre-emptive rights enable stockholders to purchase additional shares before new shares are offered to the public.

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

Bonds are usually issued in denominations of $1,000.

Interest income is generally received semiannually on zero-coupon bonds.

The term coupon yield refers to the interest rate printed on the bond certificate.

MAX Corporation stock is currently selling for $38 a share,and it pays a quarterly dividend of $0.25.What is the dividend yield on MAX Corporation?

A stock or mutual fund with a ____ beta means the security goes up when the market as a whole goes up average when the market is rising ; a ____ beta indicates the opposite.

Stocks with low price/earnings ratios tend to have

Preferred stock that pays the stockholder previously skipped dividends before the common stockholders can be paid any dividends is called ____ preferred stock.

Current shareholders generally have the right to buy additional shares in the company before new shares of the company's stock are offered to the public.This is called ____ rights.

The default rate on high-quality bonds is less than 1 percent,whereas the default rate on junk bonds ranges from 8 to 12 percent.

When a bond is first issued,it is sold at

Generally the smaller the value of a stock transaction,the higher the percentage commission charged on the transaction.

All interest received on a zero-coupon bond is taxed in the year of maturity.

In the case of noncumulative preferred stock,the preferred stockholders would have a claim to previously skipped dividends.

Which of the following sources of information about a corporation and its profitability is issued most frequently?

A new issuance of stocks is called a(n).

When interest rates are low,buy bonds.

The money left over after a company pays its expenses and interest to bondholders is called profit.

The most widely reported security market index is the

Betas are used to measure the risk of a security relative to the overall market.

Pre-emptive rights enable stockholders to purchase additional shares before new shares are offered to the public.

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

A stock or mutual fund with a beta means the security goes up when the market as a whole goes up average when the market is rising ; a beta indicates the opposite.