Question 1

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

Accepted Answer

A) True 
 B)False

Question 2

If Jodi owns 200 shares of stock, a 2-for-1 stock split will double the value of her holdings.

Accepted Answer

A) True 
 B)False

Question 3

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 4

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.

Question 5

When companies experience a bad year regarding earnings, they may choose to reduce or omit their dividend payments.

Accepted Answer

A) True 
 B)False

Question 6

Today most corporations have a website, and the information these sites provide is especially useful.

Accepted Answer

A) True 
 B)False

Question 7

Stocks are equity financing.

Accepted Answer

A) True 
 B)False

Question 8

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

Accepted Answer

A) True 
 B)False

Question 9

A put option is the right to buy 100 shares of stock at a guaranteed price before a specified expiration date.

Accepted Answer

A) True 
 B)False

Question 10

Some investors believe they have found a bargain when a stock's share price is greater than its books value.

Accepted Answer

A) True 
 B)False

Question 11

Tammy understands how to research stocks and feels quite comfortable trading her own stocks using the Internet. 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.

Question 12

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

Question 13

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

Question 14

Which of the following is correct?

Accepted Answer

A)  Ability to generate earnings is a minor factor in determining the value of a stock. 
B)  Corporate earnings are reported in the proxy statement. 
C)  Earnings per share uses the price of the stock in the calculation. 
D)  EPS is a key factor that serious investors use to evaluate stock investments. 
E)  The price/earnings ratio is the price of a share of stock divided by the corporation's earnings per share of stock. 
A)  Ability to generate earnings is a minor factor in determining the value of a stock. 
B)  Corporate earnings are reported in the proxy statement. 
C)  Earnings per share uses the price of the stock in the calculation. 
D)  EPS is a key factor that serious investors use to evaluate stock investments. 
E)  The price/earnings ratio is the price of a share of stock divided by the corporation's earnings per share of stock.

Question 15

A legal form that requests that stockholders 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 16

A distribution of money, stock, or other property that is paid to the stockholders 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 17

A prospectus that contains detailed financial data may be sent annually to stockholders of publicly owned corporations.

Accepted Answer

A) True 
 B)False

Question 18

The Yahoo! Finance website provides specific information about a particular company, including quotes and charts.

Accepted Answer

A) True 
 B)False

Question 19

The book value of a stock is determined by deducting all liabilities from the corporation's assets and dividing the remainder by the number of outstanding shares of common stock.

Accepted Answer

A) True 
 B)False

Question 20

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

Accepted Answer

A) True 
 B)False

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

If Jodi owns 200 shares of stock, a 2-for-1 stock split will double the value of her holdings.

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

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

When companies experience a bad year regarding earnings, they may choose to reduce or omit their dividend payments.

Today most corporations have a website, and the information these sites provide is especially useful.

Stocks are equity financing.

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

A put option is the right to buy 100 shares of stock at a guaranteed price before a specified expiration date.

Some investors believe they have found a bargain when a stock's share price is greater than its books value.

Tammy understands how to research stocks and feels quite comfortable trading her own stocks using the Internet. She should use a(n)

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

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.

Which of the following is correct?

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

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

A prospectus that contains detailed financial data may be sent annually to stockholders of publicly owned corporations.

The Yahoo! Finance website provides specific information about a particular company, including quotes and charts.

The book value of a stock is determined by deducting all liabilities from the corporation's assets and dividing the remainder by the number of outstanding shares of common stock.

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

Personal Financial Planning in Action

Money Management Skills

Taxes in Your Financial Plan

Financial Services: Saving Plans and Payment Accounts

Consumer Credit: Advantages, Disadvantages, Sources, and Costs

Consumer Purchasing Strategies and Wise Buying of Motor Vehicles

Selecting and Financing Housing

Home and Automobile Insurance

Health and Disability Insurance

Financial Planning With Life Insurance

Investing Fundamentals and Bonds

Investing in Mutual Funds

Starting Early: Retirement and Estate Planning

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Exam 12: Investing in Stocks

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

If Jodi owns 200 shares of stock, a 2-for-1 stock split will double the value of her holdings.

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

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

When companies experience a bad year regarding earnings, they may choose to reduce or omit their dividend payments.

Today most corporations have a website, and the information these sites provide is especially useful.

Stocks are equity financing.

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

A put option is the right to buy 100 shares of stock at a guaranteed price before a specified expiration date.

Some investors believe they have found a bargain when a stock's share price is greater than its books value.

Tammy understands how to research stocks and feels quite comfortable trading her own stocks using the Internet. She should use a(n)

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

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.

Which of the following is correct?

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

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

A prospectus that contains detailed financial data may be sent annually to stockholders of publicly owned corporations.

The Yahoo! Finance website provides specific information about a particular company, including quotes and charts.

The book value of a stock is determined by deducting all liabilities from the corporation's assets and dividing the remainder by the number of outstanding shares of common stock.

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

Personal Financial Planning in Action

Money Management Skills

Taxes in Your Financial Plan

Financial Services: Saving Plans and Payment Accounts

Consumer Credit: Advantages, Disadvantages, Sources, and Costs

Consumer Purchasing Strategies and Wise Buying of Motor Vehicles

Selecting and Financing Housing

Home and Automobile Insurance

Health and Disability Insurance

Financial Planning With Life Insurance

Investing Fundamentals and Bonds

Investing in Mutual Funds

Starting Early: Retirement and Estate Planning

Filters