Question 1

Corporate earnings are reported in the firm's annual report, or are obtained from a professional advisory service or accessing a website such as Yahoo! Finance.

Accepted Answer

A) True 
 B)False

Question 2

Glen bought XYZ stock on November 8, 2012, at a price of $39.20 and then sold it on March 19, 2014, at $11.20. Glen can be classified as a speculator.

Accepted Answer

A) True 
 B)False

Question 3

An example of dollar cost averaging is an employee purchasing shares of his or her company's stock through a payroll deduction plan or as part of a retirement plan.

Accepted Answer

A) True 
 B)False

Question 4

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

Accepted Answer

A) True 
 B)False

Question 5

Ben is selling stock that he borrowed from his broker and planned to replace at a later date. Which of the following strategies is he using?

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 6

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 7

This calculation includes the yearly dividends in dollars plus 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 8

A stock issued by a corporation that has a capitalization 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 9

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

Question 10

Using the information given here, what is the price-earnings ratio for DEF Company? (Hint: This is a two-step calculation.) 
• Earnings = $180,000
• Number of shares outstanding = 60,000
• Price per share = $30
• Book value per share = $10

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 11

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

Question 12

This calculation uses the current price per share and the annual amount of money paid to investors from the company.

Accepted Answer

A)  Book value 
B)  Dividend yield 
C)  Earnings per share 
D)  Market value 
E)  Price-earnings ratio 
A)  Book value 
B)  Dividend yield 
C)  Earnings per share 
D)  Market value 
E)  Price-earnings ratio

Question 13

Long-term investing techniques are generally more risky than short-term investing techniques.

Accepted Answer

A) True 
 B)False

Question 14

A proxy is a legal form that requests that stockholders transfer their selling rights to some individual or individuals.

Accepted Answer

A) True 
 B)False

Question 15

Cliff retired 10 years ago and wants to still own a few stocks. Dividends are important to him, and he wants to invest in a large, stable corporation. 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 16

Mary Jane owns 1,000 shares of TUV Trucking Company. TUV pays a yearly dividend of $2.00 per share. What is the total annual dividend that Mary Jane will receive?

Accepted Answer

A)  $.25. 
B)  $1.00. 
C)  $500. 
D)  $1,000. 
E)  $2,000. 
A)  $.25. 
B)  $1.00. 
C)  $500. 
D)  $1,000. 
E)  $2,000.

Question 17

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, 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, stock, or other property. 
D)  Dividends are not mandatory. 
E)  Utility companies typically distribute a higher percentage of earnings than rapidly growing firms.

Question 18

A direct investment plan does not allow you to take advantage of dollar cost averaging.

Accepted Answer

A) True 
 B)False

Question 19

If you want to guarantee that your order to sell a stock will be executed, you should place a stop order instead of a limit order.

Accepted Answer

A) True 
 B)False

Question 20

Given the information shown here for NMOP Inc., calculate the dividend yield. 
• Annual dividend = $4.00
• Number of shares outstanding = 40,000
• Current market price per share = $40.00
• Book value per share = $8.00

Accepted Answer

A)  10% 
B)  15% 
C)  20% 
D)  25% 
E)  40% 
A)  10% 
B)  15% 
C)  20% 
D)  25% 
E)  40%

Corporate earnings are reported in the firm's annual report, or are obtained from a professional advisory service or accessing a website such as Yahoo! Finance.

Glen bought XYZ stock on November 8, 2012, at a price of $39.20 and then sold it on March 19, 2014, at $11.20. Glen can be classified as a speculator.

An example of dollar cost averaging is an employee purchasing shares of his or her company's stock through a payroll deduction plan or as part of a retirement plan.

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

Ben is selling stock that he borrowed from his broker and planned to replace at a later date. Which of the following strategies is he using?

Which of the following statements is correct?

This calculation includes the yearly dividends in dollars plus the increase in the original purchase price of the investment.

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

Using the information given here, what is the price-earnings ratio for DEF Company? (Hint: This is a two-step calculation.) • Earnings = $180,000 • Number of shares outstanding = 60,000 • Price per share = $30 • Book value per share = $10

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

This calculation uses the current price per share and the annual amount of money paid to investors from the company.

Long-term investing techniques are generally more risky than short-term investing techniques.

A proxy is a legal form that requests that stockholders transfer their selling rights to some individual or individuals.

Cliff retired 10 years ago and wants to still own a few stocks. Dividends are important to him, and he wants to invest in a large, stable corporation. He should purchase _______ stocks.

Mary Jane owns 1,000 shares of TUV Trucking Company. TUV pays a yearly dividend of $2.00 per share. What is the total annual dividend that Mary Jane will receive?

All of the following statements are correct except

A direct investment plan does not allow you to take advantage of dollar cost averaging.

If you want to guarantee that your order to sell a stock will be executed, you should place a stop order instead of a limit order.

Given the information shown here for NMOP Inc., calculate the dividend yield. • Annual dividend = $4.00 • Number of shares outstanding = 40,000 • Current market price per share = $40.00 • Book value per share = $8.00

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

Corporate earnings are reported in the firm's annual report, or are obtained from a professional advisory service or accessing a website such as Yahoo! Finance.

Glen bought XYZ stock on November 8, 2012, at a price of $39.20 and then sold it on March 19, 2014, at $11.20. Glen can be classified as a speculator.

An example of dollar cost averaging is an employee purchasing shares of his or her company's stock through a payroll deduction plan or as part of a retirement plan.

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

Ben is selling stock that he borrowed from his broker and planned to replace at a later date. Which of the following strategies is he using?

Which of the following statements is correct?

This calculation includes the yearly dividends in dollars plus the increase in the original purchase price of the investment.

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

Using the information given here, what is the price-earnings ratio for DEF Company? (Hint: This is a two-step calculation.) • Earnings = $180,000 • Number of shares outstanding = 60,000 • Price per share = $30 • Book value per share = $10

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

This calculation uses the current price per share and the annual amount of money paid to investors from the company.

Long-term investing techniques are generally more risky than short-term investing techniques.

A proxy is a legal form that requests that stockholders transfer their selling rights to some individual or individuals.

Cliff retired 10 years ago and wants to still own a few stocks. Dividends are important to him, and he wants to invest in a large, stable corporation. He should purchase _______ stocks.

Mary Jane owns 1,000 shares of TUV Trucking Company. TUV pays a yearly dividend of $2.00 per share. What is the total annual dividend that Mary Jane will receive?

All of the following statements are correct except

A direct investment plan does not allow you to take advantage of dollar cost averaging.

If you want to guarantee that your order to sell a stock will be executed, you should place a stop order instead of a limit order.

Given the information shown here for NMOP Inc., calculate the dividend yield. • Annual dividend = $4.00 • Number of shares outstanding = 40,000 • Current market price per share = $40.00 • Book value per share = $8.00

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