Question 1

If the board of directors approves a three for one stock split, an investor who owns 300 shares before the split owns ____________ shares after the split.

Accepted Answer

A)  100 
B)  200 
C)  300 
D)  900 
E)  1,800 
A)  100 
B)  200 
C)  300 
D)  900 
E)  1,800

Question 2

A limit order is a request that a stock be purchased or sold at the current market price.

Accepted Answer

A) True 
 B)False

Question 3

MasterCracked Manufacturing has after-tax profits that total $725,000. If the firm has 250,000 shares, what is the amount of earnings per share?

Accepted Answer

A)  $1.25 
B)  $2 
C)  $2.90 
D)  $2.50 
E)  It is impossible to calculate earnings per share with this information. 
A)  $1.25 
B)  $2 
C)  $2.90 
D)  $2.50 
E)  It is impossible to calculate earnings per share with this information.

Question 4

Kate Babini owns 250 shares of Gildan Activewear. Suppose that for the last calendar quarter, Gildan paid $0.28 a share. What is the total amount she received in her dividend cheque for this quarter?

Accepted Answer

A)  $0.28 
B)  $2.80 
C)  $70.00 
D)  $250.00 
E)  $892.00 
A)  $0.28 
B)  $2.80 
C)  $70.00 
D)  $250.00 
E)  $892.00

Question 5

A corporation whose stock is owned by relatively few people and is not traded openly in stock markets is called a(n) ____________ corporation.

Accepted Answer

A)  private 
B)  public 
C)  equity 
D)  debt 
E)  preferred 
A)  private 
B)  public 
C)  equity 
D)  debt 
E)  preferred

Question 6

What is the primary difference between common stock and preferred stock?

Accepted Answer

The most important priority that an inve

Question 7

A stock issued by a corporation that has the potential of earning above-average profits when compared to other firms 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 8

A defensive stock is a stock that typically sells for less than $l.

Accepted Answer

A) True 
 B)False

Question 9

Matthew Debrat asks for your help! He has saved $10,000 and wants to invest in common stock. Choose one of the long-term or short-term techniques described in this chapter and explain how that method could help Matthew achieve his investment goals.

Accepted Answer

Students may choose one of the following

Question 10

To safeguard investments, stock owners who believe that the price of their stock will go down during an option period will purchase a

Accepted Answer

A)  futures contract. 
B)  short contract. 
C)  call option. 
D)  put option. 
E)  margin contract. 
A)  futures contract. 
B)  short contract. 
C)  call option. 
D)  put option. 
E)  margin contract.

Question 11

The price-earnings ratio is not affected by an increase or decrease in the firm's earnings.

Accepted Answer

A) True 
 B)False

Question 12

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

Accepted Answer

A)  option 
B)  call 
C)  margin 
D)  blue-chip 
E)  put 
A)  option 
B)  call 
C)  margin 
D)  blue-chip 
E)  put

Question 13

A stock that sells for less than $l a share is called a

Accepted Answer

A)  fractional stock. 
B)  dollar stock. 
C)  penny stock. 
D)  ten-dollar stock. 
E)  bad investment. 
A)  fractional stock. 
B)  dollar stock. 
C)  penny stock. 
D)  ten-dollar stock. 
E)  bad investment.

Question 14

Why would an investor favor a common share over a preferred share?

Accepted Answer

A)  To obtain a bigger potential capital gain. 
B)  To obtain repayment of the face value at maturity. 
C)  To obtain a fixed dividend. 
D)  To obtain a fixed coupon payment. 
E)  To obtain a variable dividend 
A)  To obtain a bigger potential capital gain. 
B)  To obtain repayment of the face value at maturity. 
C)  To obtain a fixed dividend. 
D)  To obtain a fixed coupon payment. 
E)  To obtain a variable dividend

Question 15

A public corporation is a corporation whose stocks are traded openly in stock markets and may be purchased by individuals.

Accepted Answer

A) True 
 B)False

If the board of directors approves a three for one stock split, an investor who owns 300 shares before the split owns ____________ shares after the split.

A limit order is a request that a stock be purchased or sold at the current market price.

MasterCracked Manufacturing has after-tax profits that total $725,000. If the firm has 250,000 shares, what is the amount of earnings per share?

Kate Babini owns 250 shares of Gildan Activewear. Suppose that for the last calendar quarter, Gildan paid $0.28 a share. What is the total amount she received in her dividend cheque for this quarter?

A corporation whose stock is owned by relatively few people and is not traded openly in stock markets is called a(n) ____________ corporation.

What is the primary difference between common stock and preferred stock?

A stock issued by a corporation that has the potential of earning above-average profits when compared to other firms in the economy is called a(n) ____________ stock.

A defensive stock is a stock that typically sells for less than $l.

Matthew Debrat asks for your help! He has saved $10,000 and wants to invest in common stock. Choose one of the long-term or short-term techniques described in this chapter and explain how that method could help Matthew achieve his investment goals.

To safeguard investments, stock owners who believe that the price of their stock will go down during an option period will purchase a

The price-earnings ratio is not affected by an increase or decrease in the firm's earnings.

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

A stock that sells for less than $l a share is called a

Why would an investor favor a common share over a preferred share?

A public corporation is a corporation whose stocks are traded openly in stock markets and may be purchased by individuals.

Personal Financial Planning: An Introduction

Money Management Strategy: Financial Statements and Budgeting

Planning Your Tax Strategy

The Banking Services of Financial Institutions

Introduction to Consumer Credit

Choosing a Source Credit: the Costs of Credit Alternatives

The Finances of Housing

Home and Automobile Insurance

Life, Health, and Disability Insurance

Fundamentals of Investing

Investing in Bonds

Investing in Mutual Funds

Retirement Planning

Estate Planning

Filters

Exam 11: Investing in Stocks

If the board of directors approves a three for one stock split, an investor who owns 300 shares before the split owns ____________ shares after the split.

A limit order is a request that a stock be purchased or sold at the current market price.

MasterCracked Manufacturing has after-tax profits that total $725,000. If the firm has 250,000 shares, what is the amount of earnings per share?

Kate Babini owns 250 shares of Gildan Activewear. Suppose that for the last calendar quarter, Gildan paid $0.28 a share. What is the total amount she received in her dividend cheque for this quarter?

A corporation whose stock is owned by relatively few people and is not traded openly in stock markets is called a(n) ____________ corporation.

What is the primary difference between common stock and preferred stock?

A stock issued by a corporation that has the potential of earning above-average profits when compared to other firms in the economy is called a(n) ____________ stock.

A defensive stock is a stock that typically sells for less than $l.

Matthew Debrat asks for your help! He has saved $10,000 and wants to invest in common stock. Choose one of the long-term or short-term techniques described in this chapter and explain how that method could help Matthew achieve his investment goals.

To safeguard investments, stock owners who believe that the price of their stock will go down during an option period will purchase a

The price-earnings ratio is not affected by an increase or decrease in the firm's earnings.

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

A stock that sells for less than $l a share is called a

Why would an investor favor a common share over a preferred share?

A public corporation is a corporation whose stocks are traded openly in stock markets and may be purchased by individuals.

Personal Financial Planning: An Introduction

Money Management Strategy: Financial Statements and Budgeting

Planning Your Tax Strategy

The Banking Services of Financial Institutions

Introduction to Consumer Credit

Choosing a Source Credit: the Costs of Credit Alternatives

The Finances of Housing

Home and Automobile Insurance

Life, Health, and Disability Insurance

Fundamentals of Investing

Investing in Bonds

Investing in Mutual Funds

Retirement Planning

Estate Planning

Filters