Question 1

By using the internet, it is possible to find market price quotations, but more detailed financial information about a corporation is unavailable to the average investor.

Accepted Answer

A) True 
 B)False

Question 2

Patsy Banz owns 220 shares of a stock. For the last calendar quarter, the company paid a dividend of $0.47 a share. What is the total amount she received in her dividend check for this quarter?

Accepted Answer

A)  $0.47 
B)  $47.00 
C)  $94.20 
D)  $103.40 
E)  $25.85 
A)  $0.47 
B)  $47.00 
C)  $94.20 
D)  $103.40 
E)  $25.85

Question 3

If Widget Corp. has a PEG value of .5, the stock is most likely:

Accepted Answer

A)  undervalued based on its projected growth rate. 
B)  overvalued based on its projected growth rate. 
C)  overvalued based on its $0.50 per share dividend. 
D)  overvalued based on its good historical earnings. 
E)  undervalued based on its poor historical earnings. 
A)  undervalued based on its projected growth rate. 
B)  overvalued based on its projected growth rate. 
C)  overvalued based on its $0.50 per share dividend. 
D)  overvalued based on its good historical earnings. 
E)  undervalued based on its poor historical earnings.

Question 4

The stock exchange known to trade stock for innovative, growth companies is the:

Accepted Answer

A)  NYSE. 
B)  NASDAQ. 
C)  American Stock exchange. 
D)  S & P 100. 
E)  STSE. 
A)  NYSE. 
B)  NASDAQ. 
C)  American Stock exchange. 
D)  S & P 100. 
E)  STSE.

Question 5

Christopher Pratt just bought shares of common stock. Which one of the following is he entitled to based on his ownership of these shares?

Accepted Answer

A)  Semi-annual interest payments 
B)  Guaranteed annual dividends 
C)  Right to vote on major corporate issues 
D)  Right to declare a stock split 
E)  Right to declare future dividends 
A)  Semi-annual interest payments 
B)  Guaranteed annual dividends 
C)  Right to vote on major corporate issues 
D)  Right to declare a stock split 
E)  Right to declare future dividends

Question 6

A defensive stock is a stock that typically sells for less than $1.

Accepted Answer

A) True 
 B)False

Question 7

Which one of the following is a true statement?

Accepted Answer

A)  The over-the-counter market is a network of account executives who buy and sell the securities of corporations that are not listed on a securities exchange. 
B)  Account executives in the OTC market specialize or make a market in any listed security. 
C)  OTC trading is for investors who want to buy or sell stocks in stores. 
D)  Account executives' operating in the OTC market use specialists to help them trade securities. 
E)  NASDAQ is regulated by the New York Stock Exchange. 
A)  The over-the-counter market is a network of account executives who buy and sell the securities of corporations that are not listed on a securities exchange. 
B)  Account executives in the OTC market specialize or make a market in any listed security. 
C)  OTC trading is for investors who want to buy or sell stocks in stores. 
D)  Account executives' operating in the OTC market use specialists to help them trade securities. 
E)  NASDAQ is regulated by the New York Stock Exchange.

Question 8

Quincy Martin Manufacturing stock has a market value of $48 a share. If the book value is $40 a share, the firm's market-to-book ratio is:

Accepted Answer

A)  0.8. 
B)  1.0. 
C)  1.2. 
D)  2.0. 
E)  2.4. 
A)  0.8. 
B)  1.0. 
C)  1.2. 
D)  2.0. 
E)  2.4.

Question 9

Carol Fisher wants to sell the stock of Hathaway International at the next available price after the market price reaches $50 per share. 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 10

Jeff Goldblum has just purchased a security which has no maturity date and no promised payments. He can recoup his investment by either selling the security to another individual or to the issuer, if the issuer ever makes an offer to buy it. What type of security did Jeff purchase?

Accepted Answer

A)  Stock option 
B)  Corporate bond 
C)  Government bond 
D)  Preferred stock 
E)  Common stock 
A)  Stock option 
B)  Corporate bond 
C)  Government bond 
D)  Preferred stock 
E)  Common stock

Question 11

A stock that pays higher than average dividends is called an income stock.

Accepted Answer

A) True 
 B)False

Question 12

The minimum commission charged by most brokerage firms for buying and selling stock is between $5 and:

Accepted Answer

A)  $10. 
B)  $25. 
C)  $35. 
D)  $40. 
E)  $55. 
A)  $10. 
B)  $25. 
C)  $35. 
D)  $40. 
E)  $55.

Question 13

A request that an order be executed at the next available opportunity after the market price of the stock reaches a specified price is called a ____________ order.

Accepted Answer

A)  market 
B)  limit 
C)  stop 
D)  round 
E)  discretionary 
A)  market 
B)  limit 
C)  stop 
D)  round 
E)  discretionary

Question 14

When investors purchase stock on margin, they borrow stock from a stockbroker or brokerage firm.

Accepted Answer

A) True 
 B)False

Question 15

Which one of the following statements is true?

Accepted Answer

A)  When an investor buys stocks and assumes they will increase in value, he or she is using a procedure called selling short. 
B)  Selling short is selling stock that has been borrowed from a brokerage firm. 
C)  When you sell short, you buy today, knowing you must sell or cover your short transaction at a later date. 
D)  In a short transaction, if the stock increases in value, the investor makes money. 
E)  To make money in a short transaction, you must hold on the stock for at least one year. 
A)  When an investor buys stocks and assumes they will increase in value, he or she is using a procedure called selling short. 
B)  Selling short is selling stock that has been borrowed from a brokerage firm. 
C)  When you sell short, you buy today, knowing you must sell or cover your short transaction at a later date. 
D)  In a short transaction, if the stock increases in value, the investor makes money. 
E)  To make money in a short transaction, you must hold on the stock for at least one year.

Question 16

A stock split is a procedure in which a stockholder's common stock is exchanged for preferred stock.

Accepted Answer

A) True 
 B)False

Question 17

To safeguard investments, stock owners who believe the price of their stock will go down during an option period will purchase a:

Accepted Answer

A)  futures contract. 
B)  long contract. 
C)  call option. 
D)  put option. 
E)  margin contract. 
A)  futures contract. 
B)  long contract. 
C)  call option. 
D)  put option. 
E)  margin contract.

Question 18

A long-term investment technique used by investors to purchase stock without paying a commission to a broker is called:

Accepted Answer

A)  dollar cost appreciation. 
B)  direct investment plan. 
C)  unregulated transaction. 
D)  regulated transaction. 
E)  over-the-counter transaction. 
A)  dollar cost appreciation. 
B)  direct investment plan. 
C)  unregulated transaction. 
D)  regulated transaction. 
E)  over-the-counter transaction.

Question 19

Assume that you purchased 100 shares of a stock for $70 a share, that you received an annual dividend of $0.60 a share, and that you sold your stock for $80 a share at the end of one year. What is the total return for your investment? (Ignore commission amounts for this question.)

Accepted Answer

A)  $100 
B)  $60 
C)  $760 
D)  $860 
E)  $1,060 
A)  $100 
B)  $60 
C)  $760 
D)  $860 
E)  $1,060

Question 20

After a 2-for-1 stock split:

Accepted Answer

A)  earnings per share decrease. 
B)  earnings per share increase. 
C)  capitalization decreases. 
D)  capitalization increases. 
E)  dividend yields decrease. 
A)  earnings per share decrease. 
B)  earnings per share increase. 
C)  capitalization decreases. 
D)  capitalization increases. 
E)  dividend yields decrease.

By using the internet, it is possible to find market price quotations, but more detailed financial information about a corporation is unavailable to the average investor.

Patsy Banz owns 220 shares of a stock. For the last calendar quarter, the company paid a dividend of $0.47 a share. What is the total amount she received in her dividend check for this quarter?

If Widget Corp. has a PEG value of .5, the stock is most likely:

The stock exchange known to trade stock for innovative, growth companies is the:

Christopher Pratt just bought shares of common stock. Which one of the following is he entitled to based on his ownership of these shares?

A defensive stock is a stock that typically sells for less than $1.

Which one of the following is a true statement?

Quincy Martin Manufacturing stock has a market value of $48 a share. If the book value is $40 a share, the firm's market-to-book ratio is:

Carol Fisher wants to sell the stock of Hathaway International at the next available price after the market price reaches $50 per share. What type of order should she place?

Jeff Goldblum has just purchased a security which has no maturity date and no promised payments. He can recoup his investment by either selling the security to another individual or to the issuer, if the issuer ever makes an offer to buy it. What type of security did Jeff purchase?

A stock that pays higher than average dividends is called an income stock.

The minimum commission charged by most brokerage firms for buying and selling stock is between $5 and:

A request that an order be executed at the next available opportunity after the market price of the stock reaches a specified price is called a ____________ order.

When investors purchase stock on margin, they borrow stock from a stockbroker or brokerage firm.

Which one of the following statements is true?

A stock split is a procedure in which a stockholder's common stock is exchanged for preferred stock.

To safeguard investments, stock owners who believe the price of their stock will go down during an option period will purchase a:

A long-term investment technique used by investors to purchase stock without paying a commission to a broker is called:

Assume that you purchased 100 shares of a stock for $70 a share, that you received an annual dividend of $0.60 a share, and that you sold your stock for $80 a share at the end of one year. What is the total return for your investment? (Ignore commission amounts for this question.)

After a 2-for-1 stock split:

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

By using the internet, it is possible to find market price quotations, but more detailed financial information about a corporation is unavailable to the average investor.

Patsy Banz owns 220 shares of a stock. For the last calendar quarter, the company paid a dividend of $0.47 a share. What is the total amount she received in her dividend check for this quarter?

If Widget Corp. has a PEG value of .5, the stock is most likely:

The stock exchange known to trade stock for innovative, growth companies is the:

Christopher Pratt just bought shares of common stock. Which one of the following is he entitled to based on his ownership of these shares?

A defensive stock is a stock that typically sells for less than $1.

Which one of the following is a true statement?

Quincy Martin Manufacturing stock has a market value of $48 a share. If the book value is $40 a share, the firm's market-to-book ratio is:

Carol Fisher wants to sell the stock of Hathaway International at the next available price after the market price reaches $50 per share. What type of order should she place?

Jeff Goldblum has just purchased a security which has no maturity date and no promised payments. He can recoup his investment by either selling the security to another individual or to the issuer, if the issuer ever makes an offer to buy it. What type of security did Jeff purchase?

A stock that pays higher than average dividends is called an income stock.

The minimum commission charged by most brokerage firms for buying and selling stock is between $5 and:

A request that an order be executed at the next available opportunity after the market price of the stock reaches a specified price is called a ____________ order.

When investors purchase stock on margin, they borrow stock from a stockbroker or brokerage firm.

Which one of the following statements is true?

A stock split is a procedure in which a stockholder's common stock is exchanged for preferred stock.

To safeguard investments, stock owners who believe the price of their stock will go down during an option period will purchase a:

A long-term investment technique used by investors to purchase stock without paying a commission to a broker is called:

Assume that you purchased 100 shares of a stock for $70 a share, that you received an annual dividend of $0.60 a share, and that you sold your stock for $80 a share at the end of one year. What is the total return for your investment? (Ignore commission amounts for this question.)

After a 2-for-1 stock split:

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