Exam 14: Investing in Stocks

The high, inflated stock prices that occur during stock market bubbles are often driven by investor optimism and:

A long-term technique used by investors who purchase an equal dollar amount of the same stock at equal intervals in time is called:

The date on which a shareholder must be registered on the corporation's books in order to receive dividend payments is called the:

The total return on a stock is equal to the current market value of the stock minus the investor's purchase price.

Many investors and analysts believe that a corporation's ability or inability to generate earnings in the future may be one of the most significant factors that account for an increase or decrease in the value of a stock.

Becky Martinez paid $65 a share for stock in GBX Corporation. The stock has a current market value of $48 a share and pays $1.60 a year in dividends. What is the dividend yield?

If an investor owns cumulative preferred stock, missed or omitted dividends accumulate and must be paid before any cash dividend is paid to common stockholders.

Valerie Kilmer owns stock in the Williams Widget Company. She was just advised that in the near future she will be receiving two shares for every one share she owns today. What has the company declared that will cause this change to her shares?

If a stock has a 2-for-1 split:

A limit order allows investors to specify the price at which a security will be bought or sold.

Jennifer Fritz is thinking about purchasing the stock of the Sunshine Corporation at the current market price. What type of order should she place?

Why do corporations issue stock? Why do investors buy that stock?

In order for a corporation's stock to be bought and sold on the New York Stock Exchange, the corporation must meet certain requirements. Which one of the following incorrectly states one of those requirements?

Initial public offerings (IPO's) are a ___________ investment.

A stock that pays higher than average dividends is called a(n) ____________ stock.

Because of the need for secrecy, most corporations do not supply financial information about the company on their websites.

A stock issued by a corporation that has the potential of earning above-average profits when compared to other firms in the economy is called a(n) ____________ stock.

A call option gives the purchaser the right to sell 100 shares of a stock at a guaranteed price before a definite expiration date.

Which of the following professional advisory services may charge a fee for you to access the more detailed information that may be needed to evaluate a stock investment?

A market for existing financial securities that are currently traded among investors is called the ____________ market.