Question 1

Any company's stock can be listed on the NYSE.

Accepted Answer

A) True 
 B)False

Question 2

The main goal of dollar cost averaging is buying high and selling low.

Accepted Answer

A) True 
 B)False

Question 3

Ben borrowed some securities from his broker and planned to replace them at a later date.Which of the following strategies did he use?

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 4

Patrick graduated from college five years ago.He has set up an emergency fund and has been paying off his student loans.In addition,he participates in the retirement plan offered by his employer.He wants to invest $75 per month in very small companies (capitalization of $300 million or less).He should purchase _______ stocks.

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 5

An investor must be classified as using the long-term buy-and-hold technique in order to receive dividends.

Accepted Answer

A) True 
 B)False

Question 6

Which of the following is based on historical numbers?

Accepted Answer

A)  Earnings. 
B)  Earnings per share. 
C)  Price-earnings ratio. 
D)  All of these. 
E)  None of these. 
A)  Earnings. 
B)  Earnings per share. 
C)  Price-earnings ratio. 
D)  All of these. 
E)  None of these.

Question 7

Investors who earn larger returns because they borrow part of the money needed to by a particular stock are using which of the following techniques?

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 8

List two short-term investing techniques.

Accepted Answer

Short-term techniques include

Question 9

All of the following statements are correct except

Accepted Answer

A)  Dividends are paid out of profits. 
B)  Dividend payments must be approved by the stockholders. 
C)  A dividend can be a distribution of money, but it can also be stock or other property. 
D)  Dividends are not mandatory. 
E)  Utility companies typically distribute a higher percentage of earnings than rapidly growing firms. 
A)  Dividends are paid out of profits. 
B)  Dividend payments must be approved by the stockholders. 
C)  A dividend can be a distribution of money, but it can also be stock or other property. 
D)  Dividends are not mandatory. 
E)  Utility companies typically distribute a higher percentage of earnings than rapidly growing firms.

Question 10

Which of the following statements is correct?

Accepted Answer

A)  The Internet is not to be trusted as a reliable source to evaluate potential investments. 
B)  Individual company websites usually charge for access to their own financial reports. 
C)  The Internet provides websites that may be more up to date and thorough than printed materials. 
D)  Websites like Yahoo! Finance are not dependable. 
E)  None of these is correct. 
A)  The Internet is not to be trusted as a reliable source to evaluate potential investments. 
B)  Individual company websites usually charge for access to their own financial reports. 
C)  The Internet provides websites that may be more up to date and thorough than printed materials. 
D)  Websites like Yahoo! Finance are not dependable. 
E)  None of these is correct.

Question 11

Either you can take advantage of dollar cost averaging,or you can use a direct investment plan.

Accepted Answer

A) True 
 B)False

Question 12

Excessive buying and selling of securities to generate commissions is called

Accepted Answer

A)  Churning. 
B)  Flipping. 
C)  Marketing. 
D)  Prospecting. 
E)  Scamming. 
A)  Churning. 
B)  Flipping. 
C)  Marketing. 
D)  Prospecting. 
E)  Scamming.

Question 13

The Internet provides many valid sources of stock information.

Accepted Answer

A) True 
 B)False

Question 14

Kenny wants to sell his stock at a specified price or higher.He should use a stop order.

Accepted Answer

A) True 
 B)False

Question 15

Since 1926,the average annual return for stocks has been about

Accepted Answer

A)  8%. 
B)  10%. 
C)  12%. 
D)  14%. 
E)  16%. 
A)  8%. 
B)  10%. 
C)  12%. 
D)  14%. 
E)  16%.

Question 16

Buying 100 shares of stock in an IPO is a primary market transaction.

Accepted Answer

A) True 
 B)False

Question 17

This ratio uses the market price per share of the stock and the earning per share.

Accepted Answer

A)  Book value per share 
B)  Earnings per share 
C)  Market price per share 
D)  Net income 
E)  Price-earnings ratio 
A)  Book value per share 
B)  Earnings per share 
C)  Market price per share 
D)  Net income 
E)  Price-earnings ratio

Question 18

Using the information given here,what is the price-earnings ratio for DEF Company?
• After-tax income = $180,000
• Number of shares outstanding = 60,000
• Price per share = $30
• Book value per share = $10
• Earnings per share = $3.00

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 19

Gregory purchased 600 shares of QRS stock at a price of $25 per share.In addition,he paid a commission of $30 for the transaction.How much did he need to pay his broker?

Accepted Answer

A)  $7,500. 
B)  $15,470. 
C)  $15,000. 
D)  $15,030. 
E)  $15,050. 
A)  $7,500. 
B)  $15,470. 
C)  $15,000. 
D)  $15,030. 
E)  $15,050.

Question 20

On July 3,2009,Devin purchased 100 shares of CDEF stock at a cost of $30 per share.His commission was $29.He sold his shares on July 6,2011,at a price of $45 per share less another $29 commission.During the time he held the stock,he earned dividends of $2.50 per share.What was his total return on his investment?

Accepted Answer

A)  $250 
B)  $1,492 
C)  $1,692 
D)  $1,721 
E)  $1,750 
A)  $250 
B)  $1,492 
C)  $1,692 
D)  $1,721 
E)  $1,750

Any company's stock can be listed on the NYSE.

The main goal of dollar cost averaging is buying high and selling low.

Ben borrowed some securities from his broker and planned to replace them at a later date.Which of the following strategies did he use?

An investor must be classified as using the long-term buy-and-hold technique in order to receive dividends.

Which of the following is based on historical numbers?

Investors who earn larger returns because they borrow part of the money needed to by a particular stock are using which of the following techniques?

List two short-term investing techniques.

All of the following statements are correct except

Which of the following statements is correct?

Either you can take advantage of dollar cost averaging,or you can use a direct investment plan.

Excessive buying and selling of securities to generate commissions is called

The Internet provides many valid sources of stock information.

Kenny wants to sell his stock at a specified price or higher.He should use a stop order.

Since 1926,the average annual return for stocks has been about

Buying 100 shares of stock in an IPO is a primary market transaction.

This ratio uses the market price per share of the stock and the earning per share.

Using the information given here,what is the price-earnings ratio for DEF Company? • After-tax income = $180,000 • Number of shares outstanding = 60,000 • Price per share = $30 • Book value per share = $10 • Earnings per share = $3.00

Gregory purchased 600 shares of QRS stock at a price of $25 per share.In addition,he paid a commission of $30 for the transaction.How much did he need to pay his broker?

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

Any company's stock can be listed on the NYSE.

The main goal of dollar cost averaging is buying high and selling low.

Ben borrowed some securities from his broker and planned to replace them at a later date.Which of the following strategies did he use?

An investor must be classified as using the long-term buy-and-hold technique in order to receive dividends.

Which of the following is based on historical numbers?

Investors who earn larger returns because they borrow part of the money needed to by a particular stock are using which of the following techniques?

List two short-term investing techniques.

All of the following statements are correct except

Which of the following statements is correct?

Either you can take advantage of dollar cost averaging,or you can use a direct investment plan.

Excessive buying and selling of securities to generate commissions is called

The Internet provides many valid sources of stock information.

Kenny wants to sell his stock at a specified price or higher.He should use a stop order.

Since 1926,the average annual return for stocks has been about

Buying 100 shares of stock in an IPO is a primary market transaction.

This ratio uses the market price per share of the stock and the earning per share.

Using the information given here,what is the price-earnings ratio for DEF Company? • After-tax income = $180,000 • Number of shares outstanding = 60,000 • Price per share = $30 • Book value per share = $10 • Earnings per share = $3.00

Gregory purchased 600 shares of QRS stock at a price of $25 per share.In addition,he paid a commission of $30 for the transaction.How much did he need to pay his broker?

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