Question 1

A cyclical stock is a stock that follows the business cycle of advances and declines in the economy.

Accepted Answer

A) True 
 B)False

Question 2

Lindsey Holt owns stock in the Galloway Gems Company. She knows she will receive a $1.50 dividend each quarter. Given this, you know for sure that she purchased which type of stock?

Accepted Answer

A)  Preferred 
B)  Common 
C)  Blue chip 
D)  Growth 
E)  Penny 
A)  Preferred 
B)  Common 
C)  Blue chip 
D)  Growth 
E)  Penny

Question 3

Approximately ____ percent of people under 35 years old own stocks.

Accepted Answer

A)  5 
B)  16 
C)  39 
D)  51 
E)  73 
A)  5 
B)  16 
C)  39 
D)  51 
E)  73

Question 4

George Clancy wants to diversify his portfolio by adding a stock that has a value which moves in direct relation to the business cycle. What type of stock is George thinking about adding to his portfolio?

Accepted Answer

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

Question 5

The minimum commission charged by most brokerage firms for buying or selling stock is between $5 and $25.

Accepted Answer

A) True 
 B)False

Question 6

The federal government requires that a corporation selling a new issue of securities must disclose information about the company and its finances in a(n):

Accepted Answer

A)  annual report. 
B)  quarterly report. 
C)  accountant's audit report. 
D)  prospectus. 
E)  stock guide. 
A)  annual report. 
B)  quarterly report. 
C)  accountant's audit report. 
D)  prospectus. 
E)  stock guide.

Question 7

A long-term investment technique that allows investors the option to reinvest cash dividends to purchase stock of the corporation is called:

Accepted Answer

A)  a direct investment plan. 
B)  a dividend reinvestment plan. 
C)  dollar cost averaging. 
D)  buy-and-hold. 
E)  day trading. 
A)  a direct investment plan. 
B)  a dividend reinvestment plan. 
C)  dollar cost averaging. 
D)  buy-and-hold. 
E)  day trading.

Question 8

Acme Widget, Inc. has one million shares of common stock outstanding at a price per share of $85. The company earned $5 million after taxes. The annual dividend is $3.50 per share. The firm has assets of $125,000,000 and liabilities of $25,000,000. What is the dividend yield?

Accepted Answer

A)  3.50 percent 
B)  1.43 percent 
C)  5.00 percent 
D)  4.12 percent 
E)  3.44 percent 
A)  3.50 percent 
B)  1.43 percent 
C)  5.00 percent 
D)  4.12 percent 
E)  3.44 percent

Question 9

The P-E ratio is the price of a share of stock divided by the corporation's earnings per share.

Accepted Answer

A) True 
 B)False

Question 10

The book value for a share of stock is determined by deducting all liabilities from the corporation's assets and dividing the remainder by the number of outstanding shares of common stock.

Accepted Answer

A) True 
 B)False

Question 11

The fundamental theory is based on the assumption that a stock's intrinsic or real value is determined by the future earnings of the company.

Accepted Answer

A) True 
 B)False

Question 12

Orlando Blodgett is buying stock in the Getaway Caribbean Cruise Company today. He had thought about buying the stock yesterday and if he had, he would have received this quarter's dividend. However, since he waited until today, he will not receive that dividend payment. Given this information, which one of the following dates applies to this stock today?

Accepted Answer

A)  Record date 
B)  Ex-dividend date 
C)  Payment date 
D)  Stock split date 
E)  Stock repurchase date 
A)  Record date 
B)  Ex-dividend date 
C)  Payment date 
D)  Stock split date 
E)  Stock repurchase date

Question 13

A yield calculation that takes into account the total return, the original investment, and the time that the investment is held is called ____________ yield.

Accepted Answer

A)  current 
B)  dividend 
C)  annualized holding period 
D)  capital gain 
E)  original investment 
A)  current 
B)  dividend 
C)  annualized holding period 
D)  capital gain 
E)  original investment

Question 14

Acme Widget, Inc. has 1,000 shareholders who own a total of one million shares of its common stock. The stock currently sells for $85 per share. The company earned $5 million after taxes. The annual dividend is $0.50 per share. The firm has assets of $125 million and liabilities of $25 million. What is the P-E ratio?

Accepted Answer

A)  10 
B)  11 
C)  13 
D)  17 
E)  20 
A)  10 
B)  11 
C)  13 
D)  17 
E)  20

Question 15

Amy Farmer just received a legal form in the mail from a firm in which she owns stock. This form lists the issues to be decided at the annual stockholders' meeting and asks her to give written permission for someone else to vote for her if she cannot attend. What form has she received in the mail?

Accepted Answer

A)  Equity 
B)  Proxy 
C)  Voting rights 
D)  Dividends 
E)  Call option 
A)  Equity 
B)  Proxy 
C)  Voting rights 
D)  Dividends 
E)  Call option

Question 16

Most speculators use a buy and hold technique.

Accepted Answer

A) True 
 B)False

Question 17

Which one of the following statements is true?

Accepted Answer

A)  Board members are appointed by a company's CEO. 
B)  Stockholders do not pay taxes on stock dividends. 
C)  Intelligent investors should be concerned about future after-tax corporate profits when investing. 
D)  If a cash dividend is declared by the board of directors, each stockholder will receive a different dollar amount depending on the length of time they have owned their shares. 
E)  Corporate dividends are always paid in cash. 
A)  Board members are appointed by a company's CEO. 
B)  Stockholders do not pay taxes on stock dividends. 
C)  Intelligent investors should be concerned about future after-tax corporate profits when investing. 
D)  If a cash dividend is declared by the board of directors, each stockholder will receive a different dollar amount depending on the length of time they have owned their shares. 
E)  Corporate dividends are always paid in cash.

Question 18

The stock of ABC Company has a current market price of $75. The corporation has paid a dividend of $3.75 over the last 12 months and has earnings per share of $5. What is the dividend yield?

Accepted Answer

A)  0.8 percent 
B)  1.3 percent 
C)  5.0 percent 
D)  6.7 percent 
E)  7.5 percent 
A)  0.8 percent 
B)  1.3 percent 
C)  5.0 percent 
D)  6.7 percent 
E)  7.5 percent

Question 19

On May 20, 2010, Tony Blackman bought 100 shares of stock from XYZ Corporation. The quarterly dividend is $1.25 per share and the record date is May 25. How much will Tony receive for this quarterly dividend?

Accepted Answer

A)  $0.00 
B)  $1.25 
C)  $12.50 
D)  $125.00 
E)  $0.13 
A)  $0.00 
B)  $1.25 
C)  $12.50 
D)  $125.00 
E)  $0.13

Question 20

The dividend yield for a stock investment is calculated by dividing the annual dividend by the stock's current market value.

Accepted Answer

A) True 
 B)False

A cyclical stock is a stock that follows the business cycle of advances and declines in the economy.

Lindsey Holt owns stock in the Galloway Gems Company. She knows she will receive a $1.50 dividend each quarter. Given this, you know for sure that she purchased which type of stock?

Approximately ____ percent of people under 35 years old own stocks.

George Clancy wants to diversify his portfolio by adding a stock that has a value which moves in direct relation to the business cycle. What type of stock is George thinking about adding to his portfolio?

The minimum commission charged by most brokerage firms for buying or selling stock is between $5 and $25.

The federal government requires that a corporation selling a new issue of securities must disclose information about the company and its finances in a(n):

A long-term investment technique that allows investors the option to reinvest cash dividends to purchase stock of the corporation is called:

Acme Widget, Inc. has one million shares of common stock outstanding at a price per share of $85. The company earned $5 million after taxes. The annual dividend is $3.50 per share. The firm has assets of $125,000,000 and liabilities of $25,000,000. What is the dividend yield?

The P-E ratio is the price of a share of stock divided by the corporation's earnings per share.

The book value for a share of stock is determined by deducting all liabilities from the corporation's assets and dividing the remainder by the number of outstanding shares of common stock.

The fundamental theory is based on the assumption that a stock's intrinsic or real value is determined by the future earnings of the company.

A yield calculation that takes into account the total return, the original investment, and the time that the investment is held is called ____________ yield.

Amy Farmer just received a legal form in the mail from a firm in which she owns stock. This form lists the issues to be decided at the annual stockholders' meeting and asks her to give written permission for someone else to vote for her if she cannot attend. What form has she received in the mail?

Most speculators use a buy and hold technique.

Which one of the following statements is true?

The stock of ABC Company has a current market price of $75. The corporation has paid a dividend of $3.75 over the last 12 months and has earnings per share of $5. What is the dividend yield?

On May 20, 2010, Tony Blackman bought 100 shares of stock from XYZ Corporation. The quarterly dividend is $1.25 per share and the record date is May 25. How much will Tony receive for this quarterly dividend?

The dividend yield for a stock investment is calculated by dividing the annual dividend by the stock's current market value.

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

A cyclical stock is a stock that follows the business cycle of advances and declines in the economy.

Lindsey Holt owns stock in the Galloway Gems Company. She knows she will receive a $1.50 dividend each quarter. Given this, you know for sure that she purchased which type of stock?

Approximately ____ percent of people under 35 years old own stocks.

George Clancy wants to diversify his portfolio by adding a stock that has a value which moves in direct relation to the business cycle. What type of stock is George thinking about adding to his portfolio?

The minimum commission charged by most brokerage firms for buying or selling stock is between $5 and $25.

The federal government requires that a corporation selling a new issue of securities must disclose information about the company and its finances in a(n):

A long-term investment technique that allows investors the option to reinvest cash dividends to purchase stock of the corporation is called:

Acme Widget, Inc. has one million shares of common stock outstanding at a price per share of $85. The company earned $5 million after taxes. The annual dividend is $3.50 per share. The firm has assets of $125,000,000 and liabilities of $25,000,000. What is the dividend yield?

The P-E ratio is the price of a share of stock divided by the corporation's earnings per share.

The book value for a share of stock is determined by deducting all liabilities from the corporation's assets and dividing the remainder by the number of outstanding shares of common stock.

The fundamental theory is based on the assumption that a stock's intrinsic or real value is determined by the future earnings of the company.

A yield calculation that takes into account the total return, the original investment, and the time that the investment is held is called ____________ yield.

Amy Farmer just received a legal form in the mail from a firm in which she owns stock. This form lists the issues to be decided at the annual stockholders' meeting and asks her to give written permission for someone else to vote for her if she cannot attend. What form has she received in the mail?

Most speculators use a buy and hold technique.

Which one of the following statements is true?

The stock of ABC Company has a current market price of $75. The corporation has paid a dividend of $3.75 over the last 12 months and has earnings per share of $5. What is the dividend yield?

On May 20, 2010, Tony Blackman bought 100 shares of stock from XYZ Corporation. The quarterly dividend is $1.25 per share and the record date is May 25. How much will Tony receive for this quarterly dividend?

The dividend yield for a stock investment is calculated by dividing the annual dividend by the stock's current market value.

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