Question 1

Which one of the following statements is true?

Accepted Answer

A) Board members are appointed by a company's management. 
B) Stockholders receive a tax break on dividend income. 
C) Investors should be concerned about the corporation's ability to earn profits and pay dividends in the future. 
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 management. 
B) Stockholders receive a tax break on dividend income. 
C) Investors should be concerned about the corporation's ability to earn profits and pay dividends in the future. 
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 2

Approximately ____ percent of earnings are distributed as dividends by financially secure corporations.

Accepted Answer

A) 10 to 20 
B) 20 to 30 
C) 70 to 90 
D) 40 to 60 
E) 100 
A) 10 to 20 
B) 20 to 30 
C) 70 to 90 
D) 40 to 60 
E) 100

Question 3

Both limit and _____orders may be good for one day,one week,one month,good until canceled,or a specified date.

Accepted Answer

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

Question 4

Last year,High-Tech Electronics earned $1.50 per share.If the current market value for a share of its stock is $45,what is the firm's P-E ratio?

Accepted Answer

A) 0.03 
B) 3.30 
C) 30.00 
D) 33.00 
E) 45.00 
A) 0.03 
B) 3.30 
C) 30.00 
D) 33.00 
E) 45.00

Question 5

If Widget Corp.has a PEG value of .50,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 6

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

Accepted Answer

Dollar cost averaging is a long-term tec

Question 7

If the board of directors approves a two-for-one stock split,an investor who owns 150 shares before the split will own ____________ shares after the split.

Accepted Answer

A) 75 
B) 150 
C) 225 
D) 300 
E) 450 
A) 75 
B) 150 
C) 225 
D) 300 
E) 450

Question 8

Describe information that may help you decide whether to use a full-service,discount,or on-line brokerage firm.

Accepted Answer

Full service: Beginning investors with l

Question 9

The Beta is a measure that compares the volatility associated with a specific stock issue with the volatility of the Standard & Poor's 500 Stock Index.

Accepted Answer

A) True 
 B)False

Question 10

Kay Powers wants to diversify her portfolio by investing in a firm that has the potential to earn above average profits compared to other firms in the economy.What type of stock is Kay thinking about adding to her 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 11

Barker Creek Clothing has after-tax income of $12.8 million and its earnings per share are $0.40.How many shares of stock does it have outstanding?

Accepted Answer

A) 2 million 
B) 3.1 million 
C) 12.8 million 
D) 32 million 
E) 40 million 
A) 2 million 
B) 3.1 million 
C) 12.8 million 
D) 32 million 
E) 40 million

Question 12

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 13

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 14

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 15

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

Accepted Answer

A) dollar cost averaging. 
B) dividend reinvestment plan. 
C) buy and hold technique. 
D) regulated transaction. 
E) secured transaction. 
A) dollar cost averaging. 
B) dividend reinvestment plan. 
C) buy and hold technique. 
D) regulated transaction. 
E) secured transaction.

Question 16

Which one of the following statements is true?

Accepted Answer

A) When buying stock on margin, an investor borrows stock from the brokerage firm. 
B) Usually, a bank arranges for the loan in a margin transaction. 
C) Investors buy on margin because doing so offers them the potential to buy more stock and therefore earn larger returns. 
D) The margin requirement is established by the New York Stock Exchange. 
E) The current margin requirement is 25 percent. 
A) When buying stock on margin, an investor borrows stock from the brokerage firm. 
B) Usually, a bank arranges for the loan in a margin transaction. 
C) Investors buy on margin because doing so offers them the potential to buy more stock and therefore earn larger returns. 
D) The margin requirement is established by the New York Stock Exchange. 
E) The current margin requirement is 25 percent.

Question 17

A securities exchange is a marketplace where member brokers,who represent investors,meet to buy and sell securities.

Accepted Answer

A) True 
 B)False

Question 18

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

Accepted Answer

A) True 
 B)False

Question 19

A market order is a request to buy or sell a stock at the current market value.

Accepted Answer

A) True 
 B)False

Question 20

Assume that you purchased 100 shares of a stock for $55 a share,that you received an annual dividend of $2.00 a share,and that you sold your stock for $65 a share at the end of one year.What is the total return on your investment?

Accepted Answer

A) $200 
B) $1,000 
C) $1,200 
D) $1,500 
E) $2,200 
A) $200 
B) $1,000 
C) $1,200 
D) $1,500 
E) $2,200

Which one of the following statements is true?

Approximately ____ percent of earnings are distributed as dividends by financially secure corporations.

Both limit and _____orders may be good for one day,one week,one month,good until canceled,or a specified date.

Last year,High-Tech Electronics earned $1.50 per share.If the current market value for a share of its stock is $45,what is the firm's P-E ratio?

If Widget Corp.has a PEG value of .50,the stock is most likely:

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

If the board of directors approves a two-for-one stock split,an investor who owns 150 shares before the split will own ____________ shares after the split.

Describe information that may help you decide whether to use a full-service,discount,or on-line brokerage firm.

The Beta is a measure that compares the volatility associated with a specific stock issue with the volatility of the Standard & Poor's 500 Stock Index.

Kay Powers wants to diversify her portfolio by investing in a firm that has the potential to earn above average profits compared to other firms in the economy.What type of stock is Kay thinking about adding to her portfolio?

Barker Creek Clothing has after-tax income of $12.8 million and its earnings per share are $0.40.How many shares of stock does it have outstanding?

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

Stock owners who believe the price of their stock will go down during an option period will purchase a:

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

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

Which one of the following statements is true?

A securities exchange is a marketplace where member brokers,who represent investors,meet to buy and sell securities.

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

A market order is a request to buy or sell a stock at the current market value.

Assume that you purchased 100 shares of a stock for $55 a share,that you received an annual dividend of $2.00 a share,and that you sold your stock for $65 a share at the end of one year.What is the total return on your investment?

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 Stock

Which one of the following statements is true?

Approximately ____ percent of earnings are distributed as dividends by financially secure corporations.

Both limit and _____orders may be good for one day,one week,one month,good until canceled,or a specified date.

Last year,High-Tech Electronics earned $1.50 per share.If the current market value for a share of its stock is $45,what is the firm's P-E ratio?

If Widget Corp.has a PEG value of .50,the stock is most likely:

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

If the board of directors approves a two-for-one stock split,an investor who owns 150 shares before the split will own ____________ shares after the split.

Describe information that may help you decide whether to use a full-service,discount,or on-line brokerage firm.

The Beta is a measure that compares the volatility associated with a specific stock issue with the volatility of the Standard & Poor's 500 Stock Index.

Kay Powers wants to diversify her portfolio by investing in a firm that has the potential to earn above average profits compared to other firms in the economy.What type of stock is Kay thinking about adding to her portfolio?

Barker Creek Clothing has after-tax income of $12.8 million and its earnings per share are $0.40.How many shares of stock does it have outstanding?

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

Stock owners who believe the price of their stock will go down during an option period will purchase a:

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

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

Which one of the following statements is true?

A securities exchange is a marketplace where member brokers,who represent investors,meet to buy and sell securities.

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

A market order is a request to buy or sell a stock at the current market value.

Assume that you purchased 100 shares of a stock for $55 a share,that you received an annual dividend of $2.00 a share,and that you sold your stock for $65 a share at the end of one year.What is the total return on your investment?

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