Question 1

When a corporation goes from being a private to a public firm it will sell stock in what is called a(n)________.

Accepted Answer

initial pu

Question 2

The market for newly issued securities and initial public offerings (IPOs)is the ________ market.

Accepted Answer

A) initial 
B) original 
C) primary 
D) secondary 
A) initial 
B) original 
C) primary 
D) secondary

Question 3

Most individual investors who buy and sell stock do so on the secondary market through brokers or investment companies.

Accepted Answer

A) True 
 B)False

Question 4

Bonds are certificates representing partial ownership of a firm.

Accepted Answer

A) True 
 B)False

Question 5

Common stockholders usually have more dividend rights than preferred stockholders.

Accepted Answer

A) True 
 B)False

Question 6

The security that represents equity or ownership of a corporation is

Accepted Answer

A) common stock. 
B) corporate bonds. 
C) long-term loans. 
D) commercial paper. 
A) common stock. 
B) corporate bonds. 
C) long-term loans. 
D) commercial paper.

Question 7

Stock prices are characterized by all of the following except they

Accepted Answer

A) can plummet with poor economic conditions. 
B) have a set lower limit. 
C) can be affected by negative earnings. 
D) can be increased through the company repurchasing the shares. 
A) can plummet with poor economic conditions. 
B) have a set lower limit. 
C) can be affected by negative earnings. 
D) can be increased through the company repurchasing the shares.

Question 8

Stocks that provide investors with steady income in the form of large dividends are classified as ________.

Accepted Answer

The answer of Stocks that provide investors with steady income...

Question 9

The standard deviation of a stock's monthly returns measures the degree of volatility of a stock's returns over time and can be a method of evaluating a stock's future risk.

Accepted Answer

A) True 
 B)False

Question 10

Regarding dividends paid on common stock,

Accepted Answer

A) older,established firms tend to pay lower dividends. 
B) newer firms in growth industries tend to pay higher dividends. 
C) some firms don't pay any dividends at all. 
D) a firm with high dividends is likely to have high stock price appreciation. 
A) older,established firms tend to pay lower dividends. 
B) newer firms in growth industries tend to pay higher dividends. 
C) some firms don't pay any dividends at all. 
D) a firm with high dividends is likely to have high stock price appreciation.

Question 11

If you wish to have a direct voice in the running of a company,you should purchase

Accepted Answer

A) bonds. 
B) notes. 
C) common stock. 
D) preferred stock. 
A) bonds. 
B) notes. 
C) common stock. 
D) preferred stock.

Question 12

To earn the highest possible return in the stock market,you will need to

Accepted Answer

A) invest in the most well known stocks. 
B) diversify your portfolio. 
C) accept a high level of risk. 
D) buy only the stocks of large,international firms. 
A) invest in the most well known stocks. 
B) diversify your portfolio. 
C) accept a high level of risk. 
D) buy only the stocks of large,international firms.

Question 13

Investors who buy and sell stock,sometimes in the same day,are called

Accepted Answer

A) individual investors. 
B) growth investors. 
C) institutional investors. 
D) day traders. 
A) individual investors. 
B) growth investors. 
C) institutional investors. 
D) day traders.

Question 14

Growth stocks tend to pay ________ dividends and have ________ appreciation of stock prices.

Accepted Answer

A) lower; higher 
B) higher; lower 
C) lower; lower 
D) higher; higher 
A) lower; higher 
B) higher; lower 
C) lower; lower 
D) higher; higher

Question 15

Growth stocks are likely to pay high dividends.

Accepted Answer

A) True 
 B)False

Question 16

Growth stocks tend to

Accepted Answer

A) be those of more established companies. 
B) offer great opportunities for capital appreciation. 
C) pay high dividends. 
D) be favored by more conservative investors. 
A) be those of more established companies. 
B) offer great opportunities for capital appreciation. 
C) pay high dividends. 
D) be favored by more conservative investors.

Question 17

It is December 10th and you have a stock you purchased last January 5th,which has increased in value by more than $3,000.You think the stock will not significantly increase or decrease in value over the next month or so,and you would like to take your gain.What should you do?

Accepted Answer

A) Sell the stock today and take the gain 
B) Wait until December 30th and sell the stock then 
C) Sell the stock on January 6th or later 
D) Do not sell the stock until it starts to go down in value 
A) Sell the stock today and take the gain 
B) Wait until December 30th and sell the stock then 
C) Sell the stock on January 6th or later 
D) Do not sell the stock until it starts to go down in value

Question 18

The risk-return relationship means

Accepted Answer

A) the lower the risk,the higher the return. 
B) the higher the risk,the lower the return. 
C) the higher the risk,the higher the return. 
D) risk and return have little or no correlation. 
A) the lower the risk,the higher the return. 
B) the higher the risk,the lower the return. 
C) the higher the risk,the higher the return. 
D) risk and return have little or no correlation.

Question 19

An investment that has the potential to rise substantially in value also has the potential to decline substantially in value.If you cannot afford the possible loss,you should not make that investment.

Accepted Answer

A) True 
 B)False

Question 20

Many more shares of stock are traded daily on the primary market than on the secondary market.

Accepted Answer

A) True 
 B)False

Exam 14: Investing Fundamentals

When a corporation goes from being a private to a public firm it will sell stock in what is called a(n)________.

The market for newly issued securities and initial public offerings (IPOs)is the ________ market.

Most individual investors who buy and sell stock do so on the secondary market through brokers or investment companies.

Bonds are certificates representing partial ownership of a firm.

Common stockholders usually have more dividend rights than preferred stockholders.

The security that represents equity or ownership of a corporation is

Stock prices are characterized by all of the following except they

Stocks that provide investors with steady income in the form of large dividends are classified as ________.

The standard deviation of a stock's monthly returns measures the degree of volatility of a stock's returns over time and can be a method of evaluating a stock's future risk.

Regarding dividends paid on common stock,

If you wish to have a direct voice in the running of a company,you should purchase

To earn the highest possible return in the stock market,you will need to

Investors who buy and sell stock,sometimes in the same day,are called

Growth stocks tend to pay ________ dividends and have ________ appreciation of stock prices.

Growth stocks are likely to pay high dividends.

Growth stocks tend to

It is December 10th and you have a stock you purchased last January 5th,which has increased in value by more than $3,000.You think the stock will not significantly increase or decrease in value over the next month or so,and you would like to take your gain.What should you do?

The risk-return relationship means

An investment that has the potential to rise substantially in value also has the potential to decline substantially in value.If you cannot afford the possible loss,you should not make that investment.

Many more shares of stock are traded daily on the primary market than on the secondary market.

Overview of a Financial Plan

Planning With Personal Financial Statements

Applying Time Value Concepts

Using Tax Concepts for Planning

Banking and Interest Rates

Managing Your Money

Assessing and Securing Your Credit

Managing Your Credit

Personal Loans

Purchasing and Financing a Home

Auto and Homeowners Insurance

Health and Disability Insurance

Life Insurance

Investing in Stocks

Investing in Bonds

Investing in Mutual Funds

Asset Allocation

Retirement Planning

Estate Planning

Integrating the Components of a Financial Plan

Filters

Growth stocks tend to pay dividends and have appreciation of stock prices.