Question 1

Abe was contacted by XYZ's ____________ when XYZ wanted to sell new securities to the general public for the first time.

Accepted Answer

A)  initial public offering 
B)  investment bank 
C)  primary market 
D)  secondary market 
E)  securities exchange 
A)  initial public offering 
B)  investment bank 
C)  primary market 
D)  secondary market 
E)  securities exchange

Question 2

Is the Internet a valid tool to use for evaluating stocks?
 Why or why not?

Accepted Answer

The Internet is a valid tool because it

Question 3

Stocks are equity financing.

Accepted Answer

A) True 
 B)False

Question 4

Many people do not know where to get the information they need to evaluate potential investments.

Accepted Answer

A) True 
 B)False

Question 5

What are two characteristics of common stock?

Accepted Answer

• Common stocks are the most basic form

Question 6

A licensed individual who buys or sells investments for his or her clients is called a(n)

Accepted Answer

A)  Account executive. 
B)  Account investor. 
C)  Online executive. 
D)  Market maker. 
E)  Two of these are correct. 
A)  Account executive. 
B)  Account investor. 
C)  Online executive. 
D)  Market maker. 
E)  Two of these are correct.

Question 7

Which of the following is true?

Accepted Answer

A)  Mergent's Handbook of Common Stocks is a misnomer because it analyzes only industries. 
B)  Standard & Poor's reports are available only on the Internet. 
C)  Stock advisory services include printed detailed financial reports. 
D)  Value Line is the only reliable stock advisory service used by investors. 
E)  All of these are correct. 
A)  Mergent's Handbook of Common Stocks is a misnomer because it analyzes only industries. 
B)  Standard & Poor's reports are available only on the Internet. 
C)  Stock advisory services include printed detailed financial reports. 
D)  Value Line is the only reliable stock advisory service used by investors. 
E)  All of these are correct.

Question 8

Before investing in a company's stock,an investor should analyze the industry in which the company operates.

Accepted Answer

A) True 
 B)False

Question 9

If you bought a stock on June 15,2010,and sold it on July 15,2011,you would likely be classified as a(n)

Accepted Answer

A)  Speculator. 
B)  Trader. 
C)  Investor. 
D)  Two of these are correct. 
E)  All of these are correct. 
A)  Speculator. 
B)  Trader. 
C)  Investor. 
D)  Two of these are correct. 
E)  All of these are correct.

Question 10

If the record date is Friday,April 7,the ex-dividend date is Tuesday,April 11.

Accepted Answer

A) True 
 B)False

Question 11

Dividend yield equals

Accepted Answer

A)  Annual dividend amount/Current price per share. 
B)  Quarterly dividend amount/Price per share. 
C)  Annual dividend amount/Book value per share. 
D)  Quarterly dividend amount/Book value per share. 
E)  Annual dividend amount/Earnings per share. 
A)  Annual dividend amount/Current price per share. 
B)  Quarterly dividend amount/Price per share. 
C)  Annual dividend amount/Book value per share. 
D)  Quarterly dividend amount/Book value per share. 
E)  Annual dividend amount/Earnings per share.

Question 12

A midcap stock is one issued by a company that has a capitalization of up to $300 million.

Accepted Answer

A) True 
 B)False

Question 13

Preferred stockholders elect the board of directors.

Accepted Answer

A) True 
 B)False

Question 14

This calculation includes the annual dividends in dollars and the increase in the original purchase price of the investment.

Accepted Answer

A)  Book value 
B)  Capital gain 
C)  Market value 
D)  Price-earnings ratio 
E)  Total return 
A)  Book value 
B)  Capital gain 
C)  Market value 
D)  Price-earnings ratio 
E)  Total return

Question 15

A marketplace where member brokers who represent investors meet to buy and sell securities is called a(n)

Accepted Answer

A)  Initial public offering. 
B)  Investment bank. 
C)  Primary market. 
D)  Secondary market. 
E)  Securities exchange. 
A)  Initial public offering. 
B)  Investment bank. 
C)  Primary market. 
D)  Secondary market. 
E)  Securities exchange.

Question 16

Given the information shown here for QRS Inc.,calculate the book value.
• Assets = $18,000,000
• Liabilities = $10,000,000
• Number of shares outstanding = 2,000,000

Accepted Answer

A)  $1.33 
B)  $2.50 
C)  $3.50 
D)  $4.00 
E)  $7.50 
A)  $1.33 
B)  $2.50 
C)  $3.50 
D)  $4.00 
E)  $7.50

Question 17

If you own stock,you may receive income from

Accepted Answer

A)  Dividends. 
B)  Dollar appreciation of stock value. 
C)  Possible increases in stock price due to stock splits. 
D)  Two of these are correct. 
E)  All of these are correct. 
A)  Dividends. 
B)  Dollar appreciation of stock value. 
C)  Possible increases in stock price due to stock splits. 
D)  Two of these are correct. 
E)  All of these are correct.

Question 18

The earnings per share equals

Accepted Answer

A)  Total number of shares of preferred stock divided by earnings. 
B)  Total number of shares of common stock divided by earnings. 
C)  Total earnings divided by number of shares of preferred stock. 
D)  Total earnings divided by number of shares of common and preferred stock. 
E)  None of these. 
A)  Total number of shares of preferred stock divided by earnings. 
B)  Total number of shares of common stock divided by earnings. 
C)  Total earnings divided by number of shares of preferred stock. 
D)  Total earnings divided by number of shares of common and preferred stock. 
E)  None of these.

Question 19

Cliff retired 10 years ago and wants to still own a few stocks.Dividends are important to him,but so is growth.He is most interested in stocks that are safe investments.He should purchase _______ stocks.

Accepted Answer

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

Question 20

Peter is a NASDAQ dealer who matches buy and sell orders for Ford.He is known as a(n)

Accepted Answer

A)  Account executive. 
B)  Account investor. 
C)  Discount broker. 
D)  Full-service broker. 
E)  Market maker. 
A)  Account executive. 
B)  Account investor. 
C)  Discount broker. 
D)  Full-service broker. 
E)  Market maker.

Abe was contacted by XYZ's ____________ when XYZ wanted to sell new securities to the general public for the first time.

Is the Internet a valid tool to use for evaluating stocks? Why or why not?

Stocks are equity financing.

Many people do not know where to get the information they need to evaluate potential investments.

What are two characteristics of common stock?

A licensed individual who buys or sells investments for his or her clients is called a(n)

Which of the following is true?

Before investing in a company's stock,an investor should analyze the industry in which the company operates.

If you bought a stock on June 15,2010,and sold it on July 15,2011,you would likely be classified as a(n)

If the record date is Friday,April 7,the ex-dividend date is Tuesday,April 11.

Dividend yield equals

A midcap stock is one issued by a company that has a capitalization of up to $300 million.

Preferred stockholders elect the board of directors.

This calculation includes the annual dividends in dollars and the increase in the original purchase price of the investment.

A marketplace where member brokers who represent investors meet to buy and sell securities is called a(n)

Given the information shown here for QRS Inc.,calculate the book value. • Assets = $18,000,000 • Liabilities = $10,000,000 • Number of shares outstanding = 2,000,000

If you own stock,you may receive income from

The earnings per share equals

Cliff retired 10 years ago and wants to still own a few stocks.Dividends are important to him,but so is growth.He is most interested in stocks that are safe investments.He should purchase _______ stocks.

Peter is a NASDAQ dealer who matches buy and sell orders for Ford.He is known as 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

Abe was contacted by XYZ's ____________ when XYZ wanted to sell new securities to the general public for the first time.

Is the Internet a valid tool to use for evaluating stocks? Why or why not?

Stocks are equity financing.

Many people do not know where to get the information they need to evaluate potential investments.

What are two characteristics of common stock?

A licensed individual who buys or sells investments for his or her clients is called a(n)

Which of the following is true?

Before investing in a company's stock,an investor should analyze the industry in which the company operates.

If you bought a stock on June 15,2010,and sold it on July 15,2011,you would likely be classified as a(n)

If the record date is Friday,April 7,the ex-dividend date is Tuesday,April 11.

Dividend yield equals

A midcap stock is one issued by a company that has a capitalization of up to $300 million.

Preferred stockholders elect the board of directors.

This calculation includes the annual dividends in dollars and the increase in the original purchase price of the investment.

A marketplace where member brokers who represent investors meet to buy and sell securities is called a(n)

Given the information shown here for QRS Inc.,calculate the book value. • Assets = $18,000,000 • Liabilities = $10,000,000 • Number of shares outstanding = 2,000,000

If you own stock,you may receive income from

The earnings per share equals

Cliff retired 10 years ago and wants to still own a few stocks.Dividends are important to him,but so is growth.He is most interested in stocks that are safe investments.He should purchase _______ stocks.

Peter is a NASDAQ dealer who matches buy and sell orders for Ford.He is known as 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