Question 1

When a corporation sells stock to the general public for the first time,it is referred to as a/an:

Accepted Answer

A) primary market opportunity. 
B) secondary market offering. 
C) initial public offering. 
D) investment bank offering. 
E) primary stockholder opportunity. 
A) primary market opportunity. 
B) secondary market offering. 
C) initial public offering. 
D) investment bank offering. 
E) primary stockholder opportunity. C

Question 2

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 B

Question 3

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

Accepted Answer

A) True 
 B)False  True

Question 4

If a corporation's earnings decline,the stock's value usually increases.

Accepted Answer

A) True 
 B)False

Question 5

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 6

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

Accepted Answer

Full-service brokerage firms offer a wid

Question 7

Common stock dividends are paid out of profits and:

Accepted Answer

A) must be approved by the firm's board of directors. 
B) are guaranteed to be paid quarterly. 
C) are paid prior to the firm's taxes. 
D) usually paid semi-annually. 
E) equal 100 percent of the firm's annual earnings. 
A) must be approved by the firm's board of directors. 
B) are guaranteed to be paid quarterly. 
C) are paid prior to the firm's taxes. 
D) usually paid semi-annually. 
E) equal 100 percent of the firm's annual earnings.

Question 8

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 9

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 for greater profits. 
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 for greater profits. 
D) The margin requirement is established by the New York Stock Exchange. 
E) The current margin requirement is 25 percent.

Question 10

The federal government requires corporations selling new issues of securities to disclose information about itself in a prospectus.Which of the following must be disclosed?

Accepted Answer

A) corporate earnings 
B) assets and liabilities 
C) products or services 
D) qualifications of top management 
E) all of the items listed in the other answers 
A) corporate earnings 
B) assets and liabilities 
C) products or services 
D) qualifications of top management 
E) all of the items listed in the other answers

Question 11

A very safe investment that generally attracts conservative investors is called a(n)____________ stock.

Accepted Answer

A) penny 
B) cyclical 
C) growth 
D) small cap 
E) blue chip 
A) penny 
B) cyclical 
C) growth 
D) small cap 
E) blue chip

Question 12

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

Accepted Answer

A) True 
 B)False

Question 13

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 14

A blue-chip stock is too speculative for most investors.

Accepted Answer

A) True 
 B)False

Question 15

A stock that remains stable during declines in the economy is called a(n)____________ stock.

Accepted Answer

A) defensive 
B) cyclical 
C) growth 
D) income 
E) blue-chip 
A) defensive 
B) cyclical 
C) growth 
D) income 
E) blue-chip

Question 16

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 17

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 18

Earnings per share is a corporation's after-tax earnings divided by the number of stockholders.

Accepted Answer

A) True 
 B)False

Question 19

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

Accepted Answer

A) defensive 
B) cyclical 
C) growth 
D) income 
E) blue-chip 
A) defensive 
B) cyclical 
C) growth 
D) income 
E) blue-chip

Question 20

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

When a corporation sells stock to the general public for the first time,it is referred to as a/an:

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?

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

If a corporation's earnings decline,the stock's value usually increases.

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?

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

Common stock dividends are paid out of profits and:

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?

Which one of the following statements is true?

The federal government requires corporations selling new issues of securities to disclose information about itself in a prospectus.Which of the following must be disclosed?

A very safe investment that generally attracts conservative investors is called a(n)____________ stock.

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

A blue-chip stock is too speculative for most investors.

A stock that remains stable during declines in the economy is called a(n)____________ stock.

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.

Earnings per share is a corporation's after-tax earnings divided by the number of stockholders.

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

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?

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

When a corporation sells stock to the general public for the first time,it is referred to as a/an:

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?

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

If a corporation's earnings decline,the stock's value usually increases.

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?

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

Common stock dividends are paid out of profits and:

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?

Which one of the following statements is true?

The federal government requires corporations selling new issues of securities to disclose information about itself in a prospectus.Which of the following must be disclosed?

A very safe investment that generally attracts conservative investors is called a(n)____________ stock.

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

A blue-chip stock is too speculative for most investors.

A stock that remains stable during declines in the economy is called a(n)____________ stock.

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.

Earnings per share is a corporation's after-tax earnings divided by the number of stockholders.

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

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?

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