Question 1

Devin wants to purchase DEF stock for $40.00 or less.He should use a

Accepted Answer

A)  Current sale order. 
B)  Limit order. 
C)  Market order. 
D)  Stop order. 
E)  Stop-loss order. 
A)  Current sale order. 
B)  Limit order. 
C)  Market order. 
D)  Stop order. 
E)  Stop-loss order.

Question 2

Which of the following statements about stock splits is correct?

Accepted Answer

A)  If a company has a 2-for-1 split, the price will be doubled. 
B)  If a company has a 3-for-1 split, the price will increase by a factor of 3. 
C)  If a company has a 4-for-1 split, the new number of shares will be four times as many as before the split. 
D)  If a company has a 5-for-1 split, the new number of shares will be equal to the old number of shares divided by 5. 
E)  None of these is correct. 
A)  If a company has a 2-for-1 split, the price will be doubled. 
B)  If a company has a 3-for-1 split, the price will increase by a factor of 3. 
C)  If a company has a 4-for-1 split, the new number of shares will be four times as many as before the split. 
D)  If a company has a 5-for-1 split, the new number of shares will be equal to the old number of shares divided by 5. 
E)  None of these is correct.

Question 3

Amanda wants to be part of the ownership for a corporation.She should invest in

Accepted Answer

A)  Bonds. 
B)  Common stock. 
C)  Dividends. 
D)  A savings account. 
E)  A proxy. 
A)  Bonds. 
B)  Common stock. 
C)  Dividends. 
D)  A savings account. 
E)  A proxy.

Question 4

Which of the following is not correct regarding preferred stock?

Accepted Answer

A)  Preferred stocks are considered to be safer investments than common stocks. 
B)  Owners of preferred stock have first claim to a corporation's assets after creditors in a bankruptcy. 
C)  Owners of preferred stock receive cash dividends before common stockholders receive their dividends. 
D)  The dollar amount of the dividend on preferred stock is known before the stock is purchased. 
E)  The yield on preferred stocks is often much higher than the yield on bonds. 
A)  Preferred stocks are considered to be safer investments than common stocks. 
B)  Owners of preferred stock have first claim to a corporation's assets after creditors in a bankruptcy. 
C)  Owners of preferred stock receive cash dividends before common stockholders receive their dividends. 
D)  The dollar amount of the dividend on preferred stock is known before the stock is purchased. 
E)  The yield on preferred stocks is often much higher than the yield on bonds.

Question 5

A prospectus is sent annually to stockholders of publicly owned corporations.

Accepted Answer

A) True 
 B)False

Question 6

Sandy has invested in a stock.She is assured of receiving a dividend.

Accepted Answer

A) True 
 B)False

Question 7

MNOP Inc.declared a $1.00 dividend with a record date of Thursday,September 15,and a payment date of Thursday,October 20.Cheri does not want receive this current dividend.What is the earliest date that she should purchase the stock in order to avoid receiving the dividend?

Accepted Answer

A)  September 12 
B)  September 13 
C)  September 15 
D)  October 18 
E)  October 20 
A)  September 12 
B)  September 13 
C)  September 15 
D)  October 18 
E)  October 20

Question 8

Since 1926,the average annual return for stocks is just over 12% as measured by the Standard & Poor 500 stock index.

Accepted Answer

A) True 
 B)False

Question 9

If you buy or sell with this technique,you may be required to pledge additional collateral or cash for a loan.

Accepted Answer

A)  A call option 
B)  Direct investing 
C)  Buying on margin 
D)  A put option 
E)  Selling short 
A)  A call option 
B)  Direct investing 
C)  Buying on margin 
D)  A put option 
E)  Selling short

Question 10

Whose responsibility is it to determine whether a company's stock is a good investment?

Accepted Answer

It is the investor's job to in

Question 11

Why is short-term investing riskier than long-term investing?

Accepted Answer

Short-term investing (speculating or tra

Question 12

The execution of a limit order will be the highest priority above previously received orders if and when the specified price is reached.

Accepted Answer

A) True 
 B)False

Question 13

Long-term investing techniques are generally more risky than short-term investing techniques.

Accepted Answer

A) True 
 B)False

Question 14

Claudia is a licensed individual who buys or sells investment for her clients.Which of the following is not correct?

Accepted Answer

A)  She is an account executive. 
B)  She should not use her discretion without her client's approval. 
C)  She should focus on churning for her clients. 
D)  She should provide information and advice to be used in evaluating potential investments. 
E)  All of these are correct. 
A)  She is an account executive. 
B)  She should not use her discretion without her client's approval. 
C)  She should focus on churning for her clients. 
D)  She should provide information and advice to be used in evaluating potential investments. 
E)  All of these are correct.

Question 15

An example of dollar cost averaging is an employee purchasing shares of his or her company's stock through payroll deduction as part of a retirement plan.

Accepted Answer

A) True 
 B)False

Question 16

Which of the following is incorrect?

Accepted Answer

A)  There is no substitute for researching a potential investment. 
B)  Beginning investors sometimes worry that they won't know what the information they find about stocks really means. 
C)  Some investors do not know where to get the information they need to evaluate potential investments. 
D)  The amount of information available about stocks is limited. 
E)  All of these statements are correct. 
A)  There is no substitute for researching a potential investment. 
B)  Beginning investors sometimes worry that they won't know what the information they find about stocks really means. 
C)  Some investors do not know where to get the information they need to evaluate potential investments. 
D)  The amount of information available about stocks is limited. 
E)  All of these statements are correct.

Question 17

Using the information given here,what is the price-earnings ratio for DEF Company? (Hint: This is a two-step calculation.)
• Income = $180,000
• Number of shares outstanding = 60,000
• Price per share = $30
• Book value per share = $10

Accepted Answer

A)  $3.00 
B)  $4.00 
C)  $7.50 
D)  $10.00 
E)  $20.00 
A)  $3.00 
B)  $4.00 
C)  $7.50 
D)  $10.00 
E)  $20.00

Question 18

A legal form that requests that owners transfer their voting rights to individual(s)is called a

Accepted Answer

A)  Bond. 
B)  Common stock. 
C)  Dividend. 
D)  Savings account. 
E)  Proxy. 
A)  Bond. 
B)  Common stock. 
C)  Dividend. 
D)  Savings account. 
E)  Proxy.

Question 19

The formula "(Assets - Liabilities)/Shares outstanding" equals

Accepted Answer

A)  Book value. 
B)  Dividend yield. 
C)  Earnings per share. 
D)  Market value. 
E)  Price-earnings ratio. 
A)  Book value. 
B)  Dividend yield. 
C)  Earnings per share. 
D)  Market value. 
E)  Price-earnings ratio.

Question 20

Joseph has been Leon's account executive for several years.Leon has been questioning Joseph's integrity because it appears as though Joseph might be churning.If Leon wants to take formal action about his concern,he likely will be required to use an arbitration board.

Accepted Answer

A) True 
 B)False

Devin wants to purchase DEF stock for $40.00 or less.He should use a

Which of the following statements about stock splits is correct?

Amanda wants to be part of the ownership for a corporation.She should invest in

Which of the following is not correct regarding preferred stock?

A prospectus is sent annually to stockholders of publicly owned corporations.

Sandy has invested in a stock.She is assured of receiving a dividend.

MNOP Inc.declared a $1.00 dividend with a record date of Thursday,September 15,and a payment date of Thursday,October 20.Cheri does not want receive this current dividend.What is the earliest date that she should purchase the stock in order to avoid receiving the dividend?

Since 1926,the average annual return for stocks is just over 12% as measured by the Standard & Poor 500 stock index.

If you buy or sell with this technique,you may be required to pledge additional collateral or cash for a loan.

Whose responsibility is it to determine whether a company's stock is a good investment?

Why is short-term investing riskier than long-term investing?

The execution of a limit order will be the highest priority above previously received orders if and when the specified price is reached.

Long-term investing techniques are generally more risky than short-term investing techniques.

Claudia is a licensed individual who buys or sells investment for her clients.Which of the following is not correct?

An example of dollar cost averaging is an employee purchasing shares of his or her company's stock through payroll deduction as part of a retirement plan.

Which of the following is incorrect?

Using the information given here,what is the price-earnings ratio for DEF Company? (Hint: This is a two-step calculation.) • Income = $180,000 • Number of shares outstanding = 60,000 • Price per share = $30 • Book value per share = $10

A legal form that requests that owners transfer their voting rights to individual(s)is called a

The formula "(Assets - Liabilities)/Shares outstanding" equals

Joseph has been Leon's account executive for several years.Leon has been questioning Joseph's integrity because it appears as though Joseph might be churning.If Leon wants to take formal action about his concern,he likely will be required to use an arbitration board.

Personal Financial Planning in Action

Money Management Skills

Taxes in Your Financial Plan

Financial Services: Savings Plans and Payment Account

Consumer Credit: Advantages, Dis-Advantages, Sources, and Costs

Consumer Purchasing Strategies and Wise Buying of Motor Vehicles

Selecting and Financing Housing

Home and Automobile Insurance

Health and Disability Income Insurance

Financial Planning With Life Insurance

Investing Basics and Evaluating Bonds

Investing in Mutual Funds

Starting Early: Retirement and Estate Planning

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Exam 12: Investing in Stocks

Devin wants to purchase DEF stock for $40.00 or less.He should use a

Which of the following statements about stock splits is correct?

Amanda wants to be part of the ownership for a corporation.She should invest in

Which of the following is not correct regarding preferred stock?

A prospectus is sent annually to stockholders of publicly owned corporations.

Sandy has invested in a stock.She is assured of receiving a dividend.

MNOP Inc.declared a $1.00 dividend with a record date of Thursday,September 15,and a payment date of Thursday,October 20.Cheri does not want receive this current dividend.What is the earliest date that she should purchase the stock in order to avoid receiving the dividend?

Since 1926,the average annual return for stocks is just over 12% as measured by the Standard & Poor 500 stock index.

If you buy or sell with this technique,you may be required to pledge additional collateral or cash for a loan.

Whose responsibility is it to determine whether a company's stock is a good investment?

Why is short-term investing riskier than long-term investing?

The execution of a limit order will be the highest priority above previously received orders if and when the specified price is reached.

Long-term investing techniques are generally more risky than short-term investing techniques.

Claudia is a licensed individual who buys or sells investment for her clients.Which of the following is not correct?

An example of dollar cost averaging is an employee purchasing shares of his or her company's stock through payroll deduction as part of a retirement plan.

Which of the following is incorrect?

Using the information given here,what is the price-earnings ratio for DEF Company? (Hint: This is a two-step calculation.) • Income = $180,000 • Number of shares outstanding = 60,000 • Price per share = $30 • Book value per share = $10

A legal form that requests that owners transfer their voting rights to individual(s)is called a

The formula "(Assets - Liabilities)/Shares outstanding" equals

Joseph has been Leon's account executive for several years.Leon has been questioning Joseph's integrity because it appears as though Joseph might be churning.If Leon wants to take formal action about his concern,he likely will be required to use an arbitration board.

Personal Financial Planning in Action

Money Management Skills

Taxes in Your Financial Plan

Financial Services: Savings Plans and Payment Account

Consumer Credit: Advantages, Dis-Advantages, Sources, and Costs

Consumer Purchasing Strategies and Wise Buying of Motor Vehicles

Selecting and Financing Housing

Home and Automobile Insurance

Health and Disability Income Insurance

Financial Planning With Life Insurance

Investing Basics and Evaluating Bonds

Investing in Mutual Funds

Starting Early: Retirement and Estate Planning

Filters