Exam 12: Investing in Stocks and Bonds

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. -If you buy a bond at a premium,its yield to maturity will be [higher | lower] than the coupon yield.

Free

(Multiple Choice)

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Question 1

Correct Answer:

Verified

TIPS are appropriate investors who are conservative and concerned about inflation.

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(True/False)

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Question 2

Correct Answer:

Verified

True

Advantages of a dividend reinvestment plan can include

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(Multiple Choice)

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Question 3

Correct Answer:

Verified

Typically the best time to invest in the stock market is when the market is very volatile.

(True/False)

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Question 4

A company with low financial risk has little to no long-term debt.

(True/False)

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Question 5

The relevant sale or invoice price of a bond to the buyer is its

(Multiple Choice)

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Question 6

Anderson,Inc.has $10 million liabilities,$12 million preferred stock,8 million shares of common stock outstanding,and $45 million in total assets.The book value is

(Multiple Choice)

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Question 7

Common stock owners must receive dividends before preferred stockholders.

(True/False)

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Question 8

Pulling money out of the market exposes you to the significant risk that you'll miss the months of good returns that could help you recoup prior losses.

(True/False)

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Question 9

The callable feature of a bond protects the issuer when current rates are falling.

(True/False)

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Question 10

A Puppy Pet Services $1,000 bond has a 7 1/2% coupon rate,matures in 2010 and is currently quoted at 82.The current yield is

(Multiple Choice)

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Question 11

The bondholder would receive ____ interest per year.

(Multiple Choice)

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Question 12

All treasury bonds issued today are non-callable.

(True/False)

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Question 13

Convertible preferred stock can be exchanged for common stock.

(True/False)

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Question 14

When interest rates rise,bond prices will

(Multiple Choice)

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Question 15

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. -Tax on capital gains is paid [as the stock appreciates | in the year the stock is sold].

(Multiple Choice)

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Question 16

A callable bond allows the issuer to retire the security prior to maturity.

(True/False)

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Question 17

The best returns in the stock market will be achieved by

(Multiple Choice)

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Question 18

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. -When a bond is sold between coupon payment dates,the [buyer pays the seller | seller pays the buyer] for the accrued interest.

(Multiple Choice)

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(85)

Question 19

The minimum rate of return you would like to receive in compensation for the amount of risk you have assumed is the

(Multiple Choice)

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(86)

Question 20

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INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. -If you buy a bond at a premium,its yield to maturity will be [higher | lower] than the coupon yield.

TIPS are appropriate investors who are conservative and concerned about inflation.

Advantages of a dividend reinvestment plan can include

Typically the best time to invest in the stock market is when the market is very volatile.

A company with low financial risk has little to no long-term debt.

The relevant sale or invoice price of a bond to the buyer is its

Anderson,Inc.has $10 million liabilities,$12 million preferred stock,8 million shares of common stock outstanding,and $45 million in total assets.The book value is

Common stock owners must receive dividends before preferred stockholders.

Pulling money out of the market exposes you to the significant risk that you'll miss the months of good returns that could help you recoup prior losses.

The callable feature of a bond protects the issuer when current rates are falling.

A Puppy Pet Services $1,000 bond has a 7 1/2% coupon rate,matures in 2010 and is currently quoted at 82.The current yield is

The bondholder would receive ____ interest per year.

All treasury bonds issued today are non-callable.

Convertible preferred stock can be exchanged for common stock.

When interest rates rise,bond prices will

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. -Tax on capital gains is paid [as the stock appreciates | in the year the stock is sold].

A callable bond allows the issuer to retire the security prior to maturity.

The best returns in the stock market will be achieved by

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. -When a bond is sold between coupon payment dates,the [buyer pays the seller | seller pays the buyer] for the accrued interest.

The minimum rate of return you would like to receive in compensation for the amount of risk you have assumed is the

Understanding the Financial Planning Process

Using Financial Statements and Budgets

Preparing Your Taxes

Managing Your Cash and Savings

Making Automobile and Housing Decisions

Using Credit

Using Consumer Loans

Insuring Your Life

Insuring Your Health

Protecting Your Property

Investment Planning

Investing in Mutual Funds

Planning for Retirement

Preserving Your Estate

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