Question 1

Because of the uncertainties involved in stock prices,investment professionals believe day-to-day prices to be a generally poor indicator of any stock's real value.

Accepted Answer

A) True 
 B)False

Question 2

When a security bought through an IPO is resold,where does the gain or loss go?

Accepted Answer

A)  The investor who bought the security 
B)  The bank that financed the IPO 
C)  Stakeholders with vested interests in the company 
D)  The investor who sold the security 
E)  The company 
A)  The investor who bought the security 
B)  The bank that financed the IPO 
C)  Stakeholders with vested interests in the company 
D)  The investor who sold the security 
E)  The company

Question 3

Which of the following receives and executes buy-and-sell orders for other people in return for commissions?

Accepted Answer

A)  Stock exchanges 
B)  Stock brokers 
C)  Investment banks 
D)  Stock agents 
E)  Savings banks 
A)  Stock exchanges 
B)  Stock brokers 
C)  Investment banks 
D)  Stock agents 
E)  Savings banks

Question 4

Which of the following is a summary of price trends in a specific industry and/or the stock market as a whole?

Accepted Answer

A)  Investment index 
B)  Average index 
C)  Market indicator 
D)  Market index 
E)  Prospectus 
A)  Investment index 
B)  Average index 
C)  Market indicator 
D)  Market index 
E)  Prospectus

Question 5

What is a mortgage-backed security?

Accepted Answer

A)  A bundled group of home mortgages 
B)  A bundled group of investments with AAA credit-ratings 
C)  A bundled group of bonds 
D)  A bundled group of stocks 
E)  A bundled group of loans made to risk assessment firms 
A)  A bundled group of home mortgages 
B)  A bundled group of investments with AAA credit-ratings 
C)  A bundled group of bonds 
D)  A bundled group of stocks 
E)  A bundled group of loans made to risk assessment firms

Question 6

When issuing shares of stock,what is being given to stock holders in exchange for their investment in the organization?

Accepted Answer

A)  Dividends 
B)  Voting rights 
C)  Increased par value 
D)  Tax advantages 
E)  Long-term growth on investments 
A)  Dividends 
B)  Voting rights 
C)  Increased par value 
D)  Tax advantages 
E)  Long-term growth on investments

Question 7

A stock exchange is an organization of individuals coordinated to provide an institutional auction setting in which stocks can be bought and sold.

Accepted Answer

A) True 
 B)False

Question 8

What is the advantage of exchange-traded funds (ETFs)over mutual funds?

Accepted Answer

A)  They can be traded throughout the day like a stock. 
B)  The cost of the fund management is passed on to the holder. 
C)  They do not require the services of a broker to complete a transaction. 
D)  They allow for frequent trading with lower overall transaction fees. 
E)  They regularly out-perform mutual funds. 
A)  They can be traded throughout the day like a stock. 
B)  The cost of the fund management is passed on to the holder. 
C)  They do not require the services of a broker to complete a transaction. 
D)  They allow for frequent trading with lower overall transaction fees. 
E)  They regularly out-perform mutual funds.

Question 9

An investment's current dividend yield plus its capital gain rate is known as its total return.

Accepted Answer

A) True 
 B)False

Question 10

Which is the MOST widely cited U.S.stock market index?

Accepted Answer

A)  Standard & Poor's Composite Index of 500 Stocks 
B)  The NYSE index 
C)  Dow Jones Industrial Average 
D)  Moody's Stock List 
E)  The NASDAQ 
A)  Standard & Poor's Composite Index of 500 Stocks 
B)  The NYSE index 
C)  Dow Jones Industrial Average 
D)  Moody's Stock List 
E)  The NASDAQ

Question 11

The largest stock exchange in the world is the Tokyo exchange.

Accepted Answer

A) True 
 B)False

Question 12

Although advising and underwriting may be tasks of an investment bank,distribution of new securities is NOT one of their services.

Accepted Answer

A) True 
 B)False

Question 13

New stocks and bonds are sold in what market?

Accepted Answer

A)  Private placement market 
B)  Secondary market 
C)  Primary securities market 
D)  Tertiary market 
E)  Open market 
A)  Private placement market 
B)  Secondary market 
C)  Primary securities market 
D)  Tertiary market 
E)  Open market

Question 14

What are low grade bonds usually called?

Accepted Answer

A)  Bankruptcy 
B)  Default bonds 
C)  Junk bonds 
D)  Corporate bonds 
E)  Grade B bonds 
A)  Bankruptcy 
B)  Default bonds 
C)  Junk bonds 
D)  Corporate bonds 
E)  Grade B bonds

Question 15

What value of a stock is calculated by dividing the firm's owners' equity by the total number of common shares of stock owned by all shareholders?

Accepted Answer

A)  Par value 
B)  Market value 
C)  Book value 
D)  Dividend value 
E)  Total value 
A)  Par value 
B)  Market value 
C)  Book value 
D)  Dividend value 
E)  Total value

Question 16

What is the formula for measuring a firm's working capital?

Accepted Answer

A)  Current assets = working capital /current liabilities 
B)  Working capital = current assets - current liabilities 
C)  Current liabilities = current assets + working capital 
D)  Working capital = current assets × current liabilities 
E)  Current liabilities = current assets / working capital 
A)  Current assets = working capital /current liabilities 
B)  Working capital = current assets - current liabilities 
C)  Current liabilities = current assets + working capital 
D)  Working capital = current assets × current liabilities 
E)  Current liabilities = current assets / working capital

Question 17

How can an investor request the courts to enforce a bond's terms of payment?

Accepted Answer

A)  File for bankruptcy 
B)  Ask for an improved risk rating on the bond 
C)  File a bondholders' claim 
D)  Have the bond converted to stock 
E)  Have the bond converted to a mortgage-backed security 
A)  File for bankruptcy 
B)  Ask for an improved risk rating on the bond 
C)  File a bondholders' claim 
D)  Have the bond converted to stock 
E)  Have the bond converted to a mortgage-backed security

Question 18

Investments such as money market mutual funds offer what advantage to investors?

Accepted Answer

A)  Conservative capital growth 
B)  Long-term capital growth 
C)  Market appreciation 
D)  Aggressive growth 
E)  Safety and stability 
A)  Conservative capital growth 
B)  Long-term capital growth 
C)  Market appreciation 
D)  Aggressive growth 
E)  Safety and stability

Question 19

Which of the following is the federal government agency that regulates U.S.securities markets?

Accepted Answer

A)  New York Stock Exchange 
B)  Federal Reserve 
C)  Commerce Department 
D)  Securities and Exchange Commission 
E)  Treasury Department 
A)  New York Stock Exchange 
B)  Federal Reserve 
C)  Commerce Department 
D)  Securities and Exchange Commission 
E)  Treasury Department

Question 20

What is determined when the value of outstanding shares is multiplied by the number of outstanding shares?

Accepted Answer

A)  Market capitalization 
B)  Stock split value 
C)  Earnings per dollar of investment 
D)  Dividend value 
E)  Earnings per share 
A)  Market capitalization 
B)  Stock split value 
C)  Earnings per dollar of investment 
D)  Dividend value 
E)  Earnings per share

Because of the uncertainties involved in stock prices,investment professionals believe day-to-day prices to be a generally poor indicator of any stock's real value.

When a security bought through an IPO is resold,where does the gain or loss go?

Which of the following receives and executes buy-and-sell orders for other people in return for commissions?

Which of the following is a summary of price trends in a specific industry and/or the stock market as a whole?

What is a mortgage-backed security?

When issuing shares of stock,what is being given to stock holders in exchange for their investment in the organization?

A stock exchange is an organization of individuals coordinated to provide an institutional auction setting in which stocks can be bought and sold.

What is the advantage of exchange-traded funds (ETFs)over mutual funds?

An investment's current dividend yield plus its capital gain rate is known as its total return.

Which is the MOST widely cited U.S.stock market index?

The largest stock exchange in the world is the Tokyo exchange.

Although advising and underwriting may be tasks of an investment bank,distribution of new securities is NOT one of their services.

New stocks and bonds are sold in what market?

What are low grade bonds usually called?

What value of a stock is calculated by dividing the firm's owners' equity by the total number of common shares of stock owned by all shareholders?

What is the formula for measuring a firm's working capital?

How can an investor request the courts to enforce a bond's terms of payment?

Investments such as money market mutual funds offer what advantage to investors?

Which of the following is the federal government agency that regulates U.S.securities markets?

What is determined when the value of outstanding shares is multiplied by the number of outstanding shares?

The US Business Environment

Understanding Business Ethics and Social Responsibility

Entrepreneurship, New Ventures, and Business Ownership

Understanding the Global Context of Business

Managing the Business

Organizing the Business

Operations Management and Quality

Employee Behavior and Motivation

Leadership and Decision Making

Human Resource Management and Labor Relations

Marketing Processes and Consumer Behavior

Developing and Pricing Products

Distributing and Promoting Products

Information Technology Itfor Business

The Role of Accountants and Accounting Information

Understanding Money and the Role of Banking

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Exam 17: Managing Business Finances

Because of the uncertainties involved in stock prices,investment professionals believe day-to-day prices to be a generally poor indicator of any stock's real value.

When a security bought through an IPO is resold,where does the gain or loss go?

Which of the following receives and executes buy-and-sell orders for other people in return for commissions?

Which of the following is a summary of price trends in a specific industry and/or the stock market as a whole?

What is a mortgage-backed security?

When issuing shares of stock,what is being given to stock holders in exchange for their investment in the organization?

A stock exchange is an organization of individuals coordinated to provide an institutional auction setting in which stocks can be bought and sold.

What is the advantage of exchange-traded funds (ETFs)over mutual funds?

An investment's current dividend yield plus its capital gain rate is known as its total return.

Which is the MOST widely cited U.S.stock market index?

The largest stock exchange in the world is the Tokyo exchange.

Although advising and underwriting may be tasks of an investment bank,distribution of new securities is NOT one of their services.

New stocks and bonds are sold in what market?

What are low grade bonds usually called?

What value of a stock is calculated by dividing the firm's owners' equity by the total number of common shares of stock owned by all shareholders?

What is the formula for measuring a firm's working capital?

How can an investor request the courts to enforce a bond's terms of payment?

Investments such as money market mutual funds offer what advantage to investors?

Which of the following is the federal government agency that regulates U.S.securities markets?

What is determined when the value of outstanding shares is multiplied by the number of outstanding shares?

The US Business Environment

Understanding Business Ethics and Social Responsibility

Entrepreneurship, New Ventures, and Business Ownership

Understanding the Global Context of Business

Managing the Business

Organizing the Business

Operations Management and Quality

Employee Behavior and Motivation

Leadership and Decision Making

Human Resource Management and Labor Relations

Marketing Processes and Consumer Behavior

Developing and Pricing Products

Distributing and Promoting Products

Information Technology Itfor Business

The Role of Accountants and Accounting Information

Understanding Money and the Role of Banking

Filters