Question 1

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

Accepted Answer

A)  blue chip 
B)  income 
C)  micro cap 
D)  midcap 
E)  penny 
A)  blue chip 
B)  income 
C)  micro cap 
D)  midcap 
E)  penny

Question 2

A stock issued by a company that has a capitalization of $300 million or less is called a _______ stock.

Accepted Answer

A)  blue chip 
B)  income 
C)  micro cap 
D)  midcap 
E)  penny 
A)  blue chip 
B)  income 
C)  micro cap 
D)  midcap 
E)  penny

Question 3

Book value equals

Accepted Answer

A)  (Assets + Liabilities)/Number of shares outstanding. 
B)  (Liabilities - Assets)/Number of shares outstanding. 
C)  (Assets + Liabilities)/Earnings per share. 
D)  (Liabilities + Assets/Price-earnings ratio. 
E)  (Assets - Liabilities)/Number of shares outstanding. 
A)  (Assets + Liabilities)/Number of shares outstanding. 
B)  (Liabilities - Assets)/Number of shares outstanding. 
C)  (Assets + Liabilities)/Earnings per share. 
D)  (Liabilities + Assets/Price-earnings ratio. 
E)  (Assets - Liabilities)/Number of shares outstanding.

Question 4

Equity financing is money received from the sale of

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 5

Brenda purchases stock and never plans to sell them.She could be considered to be using a

Accepted Answer

A)  Buy-and-hold technique. 
B)  Direct investment plan. 
C)  Direct reinvestment plan. 
D)  Dollar cost averaging technique. 
E)  Margin technique. 
A)  Buy-and-hold technique. 
B)  Direct investment plan. 
C)  Direct reinvestment plan. 
D)  Dollar cost averaging technique. 
E)  Margin technique.

Question 6

Avery is thinking about using the computer to do his investing.He should ask all of the following questions except

Accepted Answer

A)  Can I manage my own investments closely? 
B)  How long will I be on the computer? 
C)  How large is my investment portfolio? 
D)  None of these questions is appropriate. 
E)  Two of these are appropriate to ask. 
A)  Can I manage my own investments closely? 
B)  How long will I be on the computer? 
C)  How large is my investment portfolio? 
D)  None of these questions is appropriate. 
E)  Two of these are appropriate to ask.

Question 7

A stock issued by a corporation that has a capitalization of between $2 billion and $10 billion is called a(n)_______ stock.

Accepted Answer

A)  blue chip 
B)  income 
C)  micro cap 
D)  midcap 
E)  penny 
A)  blue chip 
B)  income 
C)  micro cap 
D)  midcap 
E)  penny

Question 8

Financial reports from advisory services include all of the following sections except

Accepted Answer

A)  Stock prices, earnings, and dividends. 
B)  Business summary. 
C)  Prospects section. 
D)  Financial data. 
E)  All of these are included in financial reports. 
A)  Stock prices, earnings, and dividends. 
B)  Business summary. 
C)  Prospects section. 
D)  Financial data. 
E)  All of these are included in financial reports.

Question 9

Stocks have been tracked for years.What has been the average annual return for stocks since 1926?

Accepted Answer

The averag

Question 10

Mary Sue owns 1,000 shares of QRS Moving Company.QRS pays a quarterly dividend of $.25 per share.What is the total annual dividend that Mary Sue will receive?

Accepted Answer

A)  $.50. 
B)  $2.00. 
C)  $250.00. 
D)  $500.00. 
E)  $1,000.00. 
A)  $.50. 
B)  $2.00. 
C)  $250.00. 
D)  $500.00. 
E)  $1,000.00.

Question 11

When companies experience low earnings,they may choose to reduce or omit their dividends.

Accepted Answer

A) True 
 B)False

Question 12

Which of the following is correct?

Accepted Answer

A)  The broker pays you interest on money borrowed to purchase stock on margin. 
B)  Selling short is selling stock borrowed from a brokerage firm. 
C)  A put option is the right, but not the obligation, to purchase a stock at a specified price by a given date. 
D)  A brokerage firm receives double its commission when stock is bought and sold when the investor is selling short. 
E)  If the stock price increases and you purchased stock on margin, you may receive a margin call. 
A)  The broker pays you interest on money borrowed to purchase stock on margin. 
B)  Selling short is selling stock borrowed from a brokerage firm. 
C)  A put option is the right, but not the obligation, to purchase a stock at a specified price by a given date. 
D)  A brokerage firm receives double its commission when stock is bought and sold when the investor is selling short. 
E)  If the stock price increases and you purchased stock on margin, you may receive a margin call.

Question 13

A micro cap stock is one issued by a company that has a capitalization of $500 million or less.

Accepted Answer

A) True 
 B)False

Question 14

Mike bought 200 shares of PDQ stock on margin at $15/share.The stock increased to $21/share.What was Mike's profit?

Accepted Answer

A)  $600 
B)  $1,200 
C)  $3,000 
D)  $4,200 
E)  $5,200 
A)  $600 
B)  $1,200 
C)  $3,000 
D)  $4,200 
E)  $5,200

Question 15

If you want to compare two companies,you should use

Accepted Answer

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

Question 16

Gavin has owned MNOP stock for several years and has seen the stock increase in value from $20 to $35.He wants to "lock in" his gains,so he needs to place an order that will sell his stock at the next available opportunity after its market price drops to $33.What kind of order should he use?

Accepted Answer

A)  Current sale order. 
B)  Limit order. 
C)  Market order. 
D)  Stop-loss order. 
E)  None of these. 
A)  Current sale order. 
B)  Limit order. 
C)  Market order. 
D)  Stop-loss order. 
E)  None of these.

Question 17

The market value must be higher than the book value.

Accepted Answer

A) True 
 B)False

Question 18

Using the information given here,what are the earnings per share for GHI Company?
• Income = $375,000
• Number of shares outstanding = 150,000
• Price per share = $60
• Book value per share = $20

Accepted Answer

A)  $0.33 
B)  $1.33 
C)  $2.50 
D)  $3.00 
E)  $7.50 
A)  $0.33 
B)  $1.33 
C)  $2.50 
D)  $3.00 
E)  $7.50

Question 19

A distribution of money,stock,or other property that is paid to owners of a company 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 20

Tanya understands the "how to" of researching stocks and likes to make her own decisions.However,she is not comfortable using the Internet to trade stocks.She should use a(n)

Accepted Answer

A)  Discount broker. 
B)  Full-service broker. 
C)  Market maker. 
D)  Online broker. 
E)  All of these are correct. 
A)  Discount broker. 
B)  Full-service broker. 
C)  Market maker. 
D)  Online broker. 
E)  All of these are correct.

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

A stock issued by a company that has a capitalization of $300 million or less is called a _______ stock.

Book value equals

Equity financing is money received from the sale of

Brenda purchases stock and never plans to sell them.She could be considered to be using a

Avery is thinking about using the computer to do his investing.He should ask all of the following questions except

A stock issued by a corporation that has a capitalization of between $2 billion and $10 billion is called a(n)_______ stock.

Financial reports from advisory services include all of the following sections except

Stocks have been tracked for years.What has been the average annual return for stocks since 1926?

Mary Sue owns 1,000 shares of QRS Moving Company.QRS pays a quarterly dividend of $.25 per share.What is the total annual dividend that Mary Sue will receive?

When companies experience low earnings,they may choose to reduce or omit their dividends.

Which of the following is correct?

A micro cap stock is one issued by a company that has a capitalization of $500 million or less.

Mike bought 200 shares of PDQ stock on margin at $15/share.The stock increased to $21/share.What was Mike's profit?

If you want to compare two companies,you should use

Gavin has owned MNOP stock for several years and has seen the stock increase in value from $20 to $35.He wants to "lock in" his gains,so he needs to place an order that will sell his stock at the next available opportunity after its market price drops to $33.What kind of order should he use?

The market value must be higher than the book value.

Using the information given here,what are the earnings per share for GHI Company? • Income = $375,000 • Number of shares outstanding = 150,000 • Price per share = $60 • Book value per share = $20

A distribution of money,stock,or other property that is paid to owners of a company is called a

Tanya understands the "how to" of researching stocks and likes to make her own decisions.However,she is not comfortable using the Internet to trade stocks.She should use a(n)

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

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

A stock issued by a company that has a capitalization of $300 million or less is called a _______ stock.

Book value equals

Equity financing is money received from the sale of

Brenda purchases stock and never plans to sell them.She could be considered to be using a

Avery is thinking about using the computer to do his investing.He should ask all of the following questions except

A stock issued by a corporation that has a capitalization of between $2 billion and $10 billion is called a(n)_______ stock.

Financial reports from advisory services include all of the following sections except

Stocks have been tracked for years.What has been the average annual return for stocks since 1926?

Mary Sue owns 1,000 shares of QRS Moving Company.QRS pays a quarterly dividend of $.25 per share.What is the total annual dividend that Mary Sue will receive?

When companies experience low earnings,they may choose to reduce or omit their dividends.

Which of the following is correct?

A micro cap stock is one issued by a company that has a capitalization of $500 million or less.

Mike bought 200 shares of PDQ stock on margin at $15/share.The stock increased to $21/share.What was Mike's profit?

If you want to compare two companies,you should use

Gavin has owned MNOP stock for several years and has seen the stock increase in value from $20 to $35.He wants to "lock in" his gains,so he needs to place an order that will sell his stock at the next available opportunity after its market price drops to $33.What kind of order should he use?

The market value must be higher than the book value.

Using the information given here,what are the earnings per share for GHI Company? • Income = $375,000 • Number of shares outstanding = 150,000 • Price per share = $60 • Book value per share = $20

A distribution of money,stock,or other property that is paid to owners of a company is called a

Tanya understands the "how to" of researching stocks and likes to make her own decisions.However,she is not comfortable using the Internet to trade stocks.She should use a(n)

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