Question 1

Blue-chip stocks are expected to pay dividends more regularly than growth stocks.

Accepted Answer

A) True 
 B)False

Question 2

Preferred stock can be exchanged for common stock.

Accepted Answer

A) True 
 B)False

Question 3

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. 
-The [higher | lower] the PE ratio,the less confidence investors are said to have in the corporation.

Accepted Answer

A) for the first item 
B) for the second item 
C) if neither item will correctly complete the statement. 
A) for the first item 
B) for the second item 
C) if neither item will correctly complete the statement.

Question 4

____ stocks are really purchased as a gamble rather then because they have a proven history of good performance.

Accepted Answer

A)  Blue-chip 
B)  Growth 
C)  Cyclical 
D)  Defensive 
E)  Speculative 
A)  Blue-chip 
B)  Growth 
C)  Cyclical 
D)  Defensive 
E)  Speculative

Question 5

A bond is issued at $1,000 par value during a time in which interest rates for similar bonds were 8%.Today new bonds issued with a similar credit worthiness is 10%.Which of the following is most likely to be true about the bond.

Accepted Answer

A)  It is currently selling for a premium 
B)  It is currently selling at a discount 
C)  currently selling at par 
D)  The bond is likely to be called 
E)  none of the above 
A)  It is currently selling for a premium 
B)  It is currently selling at a discount 
C)  currently selling at par 
D)  The bond is likely to be called 
E)  none of the above

Question 6

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. 
-More conservative investors would prefer stocks with [higher | lower] betas.

Accepted Answer

A) for the first item 
B) for the second item 
C) if neither item will correctly complete the statement. 
A) for the first item 
B) for the second item 
C) if neither item will correctly complete the statement.

Question 7

Price fluctuations of defensive stocks follow the fluctuations of the market as a whole.

Accepted Answer

A) True 
 B)False

Question 8

The approximate yield to maturity when the average income is $1.00,the average capital gain is $5.00,the average investment is $26.00,and the investment is held for 10 years is

Accepted Answer

A)  11 percent. 
B)  23 percent. 
C)  27 percent. 
D)  33 percent. 
E)  50 percent. 
A)  11 percent. 
B)  23 percent. 
C)  27 percent. 
D)  33 percent. 
E)  50 percent.

Question 9

Positive aspects about bonds do not include

Accepted Answer

A)  high long-run return. 
B)  desirable diversification properties. 
C)  low risk. 
D)  high current income. 
E)  a and b 
A)  high long-run return. 
B)  desirable diversification properties. 
C)  low risk. 
D)  high current income. 
E)  a and b

Question 10

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. 
-The possibility that a corporation might fail is [economic | business] risk.

Accepted Answer

A) for the first item 
B) for the second item 
C) if neither item will correctly complete the statement. 
A) for the first item 
B) for the second item 
C) if neither item will correctly complete the statement.

Question 11

Calculate the dividend yield on OPQ stock.Earnings per share are $2.75 and the quarterly dividend is 25 cents.The book value is $15.20 per share while the market value is $25.00.

Accepted Answer

Dividend y

Question 12

Treasury notes,bills,and bonds represent loans to the federal government.

Accepted Answer

A) True 
 B)False

Question 13

Income stocks are similar to bonds in that they pay annual interest to owners.

Accepted Answer

A) True 
 B)False

Question 14

The value of a stock at any time is a function of future returns rather than of past performance.

Accepted Answer

A) True 
 B)False

Question 15

Earnings per share (EPS)tell the stockholder the amount of dividend earned.

Accepted Answer

A) True 
 B)False

Question 16

Bonds represent a form of corporate debt capital.

Accepted Answer

A) True 
 B)False

Question 17

Net Profit margin is a key measure of profitability that relates the net profits of a firm to its sales.

Accepted Answer

A) True 
 B)False

Question 18

Risk and return are ____ related.

Accepted Answer

A)  inversely 
B)  directly 
C)  slightly 
D)  oppositely 
E)  none of the above 
A)  inversely 
B)  directly 
C)  slightly 
D)  oppositely 
E)  none of the above

Question 19

Publicly traded issues are shares only available to qualified investors.

Accepted Answer

A) True 
 B)False

Question 20

Suppose the EPS of Wal-Mart stock was $2 and the current price per earnings ratio is 10.What is the current price of Wal-Mart stock?

Accepted Answer

A)  $5 
B)  $8 
C)  $20 
D)  $40 
E)  Can not compute with given information 
A)  $5 
B)  $8 
C)  $20 
D)  $40 
E)  Can not compute with given information

Blue-chip stocks are expected to pay dividends more regularly than growth stocks.

Preferred stock can be exchanged for common stock.

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. -The [higher | lower] the PE ratio,the less confidence investors are said to have in the corporation.

____ stocks are really purchased as a gamble rather then because they have a proven history of good performance.

A bond is issued at $1,000 par value during a time in which interest rates for similar bonds were 8%.Today new bonds issued with a similar credit worthiness is 10%.Which of the following is most likely to be true about the bond.

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. -More conservative investors would prefer stocks with [higher | lower] betas.

Price fluctuations of defensive stocks follow the fluctuations of the market as a whole.

The approximate yield to maturity when the average income is $1.00,the average capital gain is $5.00,the average investment is $26.00,and the investment is held for 10 years is

Positive aspects about bonds do not include

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. -The possibility that a corporation might fail is [economic | business] risk.

Calculate the dividend yield on OPQ stock.Earnings per share are $2.75 and the quarterly dividend is 25 cents.The book value is $15.20 per share while the market value is $25.00.

Treasury notes,bills,and bonds represent loans to the federal government.

Income stocks are similar to bonds in that they pay annual interest to owners.

The value of a stock at any time is a function of future returns rather than of past performance.

Earnings per share (EPS)tell the stockholder the amount of dividend earned.

Bonds represent a form of corporate debt capital.

Net Profit margin is a key measure of profitability that relates the net profits of a firm to its sales.

Risk and return are ____ related.

Publicly traded issues are shares only available to qualified investors.

Suppose the EPS of Wal-Mart stock was $2 and the current price per earnings ratio is 10.What is the current price of Wal-Mart stock?

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

Filters

Exam 12: Investing in Stocks and Bonds

Blue-chip stocks are expected to pay dividends more regularly than growth stocks.

Preferred stock can be exchanged for common stock.

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. -The [higher | lower] the PE ratio,the less confidence investors are said to have in the corporation.

____ stocks are really purchased as a gamble rather then because they have a proven history of good performance.

A bond is issued at $1,000 par value during a time in which interest rates for similar bonds were 8%.Today new bonds issued with a similar credit worthiness is 10%.Which of the following is most likely to be true about the bond.

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. -More conservative investors would prefer stocks with [higher | lower] betas.

Price fluctuations of defensive stocks follow the fluctuations of the market as a whole.

The approximate yield to maturity when the average income is $1.00,the average capital gain is $5.00,the average investment is $26.00,and the investment is held for 10 years is

Positive aspects about bonds do not include

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. -The possibility that a corporation might fail is [economic | business] risk.

Calculate the dividend yield on OPQ stock.Earnings per share are $2.75 and the quarterly dividend is 25 cents.The book value is $15.20 per share while the market value is $25.00.

Treasury notes,bills,and bonds represent loans to the federal government.

Income stocks are similar to bonds in that they pay annual interest to owners.

The value of a stock at any time is a function of future returns rather than of past performance.

Earnings per share (EPS)tell the stockholder the amount of dividend earned.

Bonds represent a form of corporate debt capital.

Net Profit margin is a key measure of profitability that relates the net profits of a firm to its sales.

Risk and return are ____ related.

Publicly traded issues are shares only available to qualified investors.

Suppose the EPS of Wal-Mart stock was $2 and the current price per earnings ratio is 10.What is the current price of Wal-Mart stock?

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

Filters