Question 1

Masterworks Manufacturing has after-tax profits that total $625,000. If the firm has 250,000 shares, what is the amount of earnings per share?

Accepted Answer

A)  $0.40 
B)  $1.00 
C)  $2.00 
D)  $2.50 
E)  $4.00 
A)  $0.40 
B)  $1.00 
C)  $2.00 
D)  $2.50 
E)  $4.00

Question 2

By using the Yahoo! Finance website, an investor can find all of the following information on a stock except its:

Accepted Answer

A)  historical prices. 
B)  stock symbol. 
C)  current market value. 
D)  most recent dividend. 
E)  actual rate of return for the next year. 
A)  historical prices. 
B)  stock symbol. 
C)  current market value. 
D)  most recent dividend. 
E)  actual rate of return for the next year.

Question 3

Acme Widget, Inc. has 1,000 shareholders who own a total of one million shares of its common stock. The company earned $10 million after taxes and paid out $4 million in dividends. The firm has assets of $125 million and liabilities of $25 million. What is the book value per share?

Accepted Answer

A)  $4 
B)  $125 
C)  $10 
D)  $100 
E)  $25 
A)  $4 
B)  $125 
C)  $10 
D)  $100 
E)  $25

Question 4

To raise capital, many corporate financial managers prefer selling common stock because:

Accepted Answer

A)  it doesn't have to be repaid until 10 to 15 years after it has been issued. 
B)  interest payments to stockholders are lower than interest paid to a bank. 
C)  common shareholders have no voting rights. 
D)  interest paid to stockholders is tax deductible. 
E)  the money obtained from stockholders does not have to be repaid. 
A)  it doesn't have to be repaid until 10 to 15 years after it has been issued. 
B)  interest payments to stockholders are lower than interest paid to a bank. 
C)  common shareholders have no voting rights. 
D)  interest paid to stockholders is tax deductible. 
E)  the money obtained from stockholders does not have to be repaid.

Question 5

Describe the difference between full-service, discount, and on-line brokerage firms.

Accepted Answer

Full-service brokerage firms offer a wid

Question 6

Preferred stock is often referred to as a middle investment as it has features similar to both common stock and corporate bonds.

Accepted Answer

A) True 
 B)False

Question 7

The annualized holding period yield calculation takes into account the time the investment is held.

Accepted Answer

A) True 
 B)False

Question 8

Ms. Hart's stock club uses numerous charts that plot past price movements and other stock ratios. Her club relies on _______ analysis to determine stock selections.

Accepted Answer

A)  fundamental 
B)  technical 
C)  efficient market 
D)  chart 
E)  plot 
A)  fundamental 
B)  technical 
C)  efficient market 
D)  chart 
E)  plot

Question 9

Gaby Williams is thinking about buying some stock but wants some protection should the issuer miss paying a dividend payment. Which one of the following features would help provide this protection?

Accepted Answer

A)  Convertible 
B)  Callable 
C)  Cumulative 
D)  Cancellable 
E)  Common 
A)  Convertible 
B)  Callable 
C)  Cumulative 
D)  Cancellable 
E)  Common

Question 10

Ashley Riley wants to buy the stock of XYZ Company at a specified price. What type of order should she place?

Accepted Answer

A)  Market order 
B)  Limit order 
C)  Stop order 
D)  Discretionary order 
E)  Common order 
A)  Market order 
B)  Limit order 
C)  Stop order 
D)  Discretionary order 
E)  Common order

Question 11

Sean Barber wants to invest in a stock that is relatively safe, suitable for conservative investors, and less speculative than other stocks. What type of stock best fits Sean's requirements?

Accepted Answer

A)  Midcap stock 
B)  Cyclical stock 
C)  Small-cap stock 
D)  Blue-chip stock 
E)  Growth stock 
A)  Midcap stock 
B)  Cyclical stock 
C)  Small-cap stock 
D)  Blue-chip stock 
E)  Growth stock

Question 12

Explain what dollar cost averaging is and why an investor would use the technique.

Accepted Answer

The answer of Explain what dollar cost averaging is and...

Question 13

A low market-to-book ratio (less than 1) could indicate that a stock is undervalued.

Accepted Answer

A) True 
 B)False

Question 14

Dollar cost averaging helps investors avoid the problem of buying high and selling low.

Accepted Answer

A) True 
 B)False

Question 15

The Arnold Fertilizer Company's stock is selling for $55 in the market and its earnings per share is $5. The company is projected to grow at a rate of 22% over the next year. What is this company's price/earnings to growth (PEG) ratio?

Accepted Answer

A)  11.00 
B)  9.09 
C)  0.50 
D)  50.00 
E)  22.73 
A)  11.00 
B)  9.09 
C)  0.50 
D)  50.00 
E)  22.73

Question 16

An increase in a corporation's earnings per share is a healthy sign.

Accepted Answer

A) True 
 B)False

Question 17

James Green just bought a security which he expects will provide him with a quarterly cash payment, although that payment is not guaranteed. In fact, he expects the amount of the payment to vary over time. What type of payment is he expecting to receive?

Accepted Answer

A)  Option premium 
B)  Interest 
C)  Capital gain 
D)  Dividend 
E)  Rebate 
A)  Option premium 
B)  Interest 
C)  Capital gain 
D)  Dividend 
E)  Rebate

Question 18

Jo Bower purchased 150 shares of stock for $24 a share and sold it for $30 a share. The commissions required to buy and sell her stock totaled $120. Assuming she received no dividends during the time she owned the stock, what is her total return on this investment?

Accepted Answer

A)  $600 
B)  $780 
C)  $900 
D)  $2,400 
E)  $3,000 
A)  $600 
B)  $780 
C)  $900 
D)  $2,400 
E)  $3,000

Question 19

To calculate dividend yield, the annual dividend amount per share is divided by the _______ per share.

Accepted Answer

A)  current stock price 
B)  stock's original issue value 
C)  current earnings 
D)  current book value 
E)  current sales 
A)  current stock price 
B)  stock's original issue value 
C)  current earnings 
D)  current book value 
E)  current sales

Question 20

Which one of the following is a true statement?

Accepted Answer

A)  When choosing a stock advisory service that charges fees for their investment advice, the quality of the information is always excellent. 
B)  Mergent's Investors Service only provides information about bonds. 
C)  Value Line provides information about bonds and mutual funds, but not common stocks. 
D)  The information provided by investors' services consists of simple alphabetical listings only. 
E)  Online computer services may be used to research companies and to obtain current stock prices. 
A)  When choosing a stock advisory service that charges fees for their investment advice, the quality of the information is always excellent. 
B)  Mergent's Investors Service only provides information about bonds. 
C)  Value Line provides information about bonds and mutual funds, but not common stocks. 
D)  The information provided by investors' services consists of simple alphabetical listings only. 
E)  Online computer services may be used to research companies and to obtain current stock prices.

Masterworks Manufacturing has after-tax profits that total $625,000. If the firm has 250,000 shares, what is the amount of earnings per share?

By using the Yahoo! Finance website, an investor can find all of the following information on a stock except its:

Acme Widget, Inc. has 1,000 shareholders who own a total of one million shares of its common stock. The company earned $10 million after taxes and paid out $4 million in dividends. The firm has assets of $125 million and liabilities of $25 million. What is the book value per share?

To raise capital, many corporate financial managers prefer selling common stock because:

Describe the difference between full-service, discount, and on-line brokerage firms.

Preferred stock is often referred to as a middle investment as it has features similar to both common stock and corporate bonds.

The annualized holding period yield calculation takes into account the time the investment is held.

Ms. Hart's stock club uses numerous charts that plot past price movements and other stock ratios. Her club relies on _______ analysis to determine stock selections.

Gaby Williams is thinking about buying some stock but wants some protection should the issuer miss paying a dividend payment. Which one of the following features would help provide this protection?

Ashley Riley wants to buy the stock of XYZ Company at a specified price. What type of order should she place?

Sean Barber wants to invest in a stock that is relatively safe, suitable for conservative investors, and less speculative than other stocks. What type of stock best fits Sean's requirements?

Explain what dollar cost averaging is and why an investor would use the technique.

A low market-to-book ratio (less than 1) could indicate that a stock is undervalued.

Dollar cost averaging helps investors avoid the problem of buying high and selling low.

The Arnold Fertilizer Company's stock is selling for $55 in the market and its earnings per share is $5. The company is projected to grow at a rate of 22% over the next year. What is this company's price/earnings to growth (PEG) ratio?

An increase in a corporation's earnings per share is a healthy sign.

James Green just bought a security which he expects will provide him with a quarterly cash payment, although that payment is not guaranteed. In fact, he expects the amount of the payment to vary over time. What type of payment is he expecting to receive?

Jo Bower purchased 150 shares of stock for $24 a share and sold it for $30 a share. The commissions required to buy and sell her stock totaled $120. Assuming she received no dividends during the time she owned the stock, what is her total return on this investment?

To calculate dividend yield, the annual dividend amount per share is divided by the _______ per share.

Which one of the following is a true statement?

Personal Finance Basics and the Time Value of Money

Financial Aspects of Career Planning

Money Management Strategy: Financial Statements and Budgeting

Planning Your Tax Strategy

Financial Services: Savings Plans and Payment Accounts

Introduction to Consumer Credit

Choosing a Source of Credit: The Costs of Credit Alternatives

Consumer Purchasing Strategies and Legal Protection

The Housing Decision: Factors and Finances

Property and Motor Vehicle Insurance

Health, Disability, and Long-Term Care Insurance

Life Insurance

Investing Fundamentals

Investing in Bonds

Investing in Mutual Funds

Investing in Real Estate and Other Investment Alternatives

Starting Early: Retirement Planning

Estate Planning

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Exam 14: Investing in Stocks

Masterworks Manufacturing has after-tax profits that total $625,000. If the firm has 250,000 shares, what is the amount of earnings per share?

By using the Yahoo! Finance website, an investor can find all of the following information on a stock except its:

Acme Widget, Inc. has 1,000 shareholders who own a total of one million shares of its common stock. The company earned $10 million after taxes and paid out $4 million in dividends. The firm has assets of $125 million and liabilities of $25 million. What is the book value per share?

To raise capital, many corporate financial managers prefer selling common stock because:

Describe the difference between full-service, discount, and on-line brokerage firms.

Preferred stock is often referred to as a middle investment as it has features similar to both common stock and corporate bonds.

The annualized holding period yield calculation takes into account the time the investment is held.

Ms. Hart's stock club uses numerous charts that plot past price movements and other stock ratios. Her club relies on _______ analysis to determine stock selections.

Gaby Williams is thinking about buying some stock but wants some protection should the issuer miss paying a dividend payment. Which one of the following features would help provide this protection?

Ashley Riley wants to buy the stock of XYZ Company at a specified price. What type of order should she place?

Sean Barber wants to invest in a stock that is relatively safe, suitable for conservative investors, and less speculative than other stocks. What type of stock best fits Sean's requirements?

Explain what dollar cost averaging is and why an investor would use the technique.

A low market-to-book ratio (less than 1) could indicate that a stock is undervalued.

Dollar cost averaging helps investors avoid the problem of buying high and selling low.

The Arnold Fertilizer Company's stock is selling for $55 in the market and its earnings per share is $5. The company is projected to grow at a rate of 22% over the next year. What is this company's price/earnings to growth (PEG) ratio?

An increase in a corporation's earnings per share is a healthy sign.

James Green just bought a security which he expects will provide him with a quarterly cash payment, although that payment is not guaranteed. In fact, he expects the amount of the payment to vary over time. What type of payment is he expecting to receive?

Jo Bower purchased 150 shares of stock for $24 a share and sold it for $30 a share. The commissions required to buy and sell her stock totaled $120. Assuming she received no dividends during the time she owned the stock, what is her total return on this investment?

To calculate dividend yield, the annual dividend amount per share is divided by the _______ per share.

Which one of the following is a true statement?

Personal Finance Basics and the Time Value of Money

Financial Aspects of Career Planning

Money Management Strategy: Financial Statements and Budgeting

Planning Your Tax Strategy

Financial Services: Savings Plans and Payment Accounts

Introduction to Consumer Credit

Choosing a Source of Credit: The Costs of Credit Alternatives

Consumer Purchasing Strategies and Legal Protection

The Housing Decision: Factors and Finances

Property and Motor Vehicle Insurance

Health, Disability, and Long-Term Care Insurance

Life Insurance

Investing Fundamentals

Investing in Bonds

Investing in Mutual Funds

Investing in Real Estate and Other Investment Alternatives

Starting Early: Retirement Planning

Estate Planning

Filters