Exam 14: Investing Fundamentals

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.

The higher the dividend paid by a firm,the lower its potential stock price appreciation.

A company has a choice of whether to distribute dividends to common shareholders or to keep its profits in the company as retained earnings.

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

If you purchase 100 shares of XYZ Corporation for $50 per share,receive a dividend check for $200,and then sell the stock for $62 per share,what will your return on the stock be?

If economic conditions deteriorate,stock prices are likely to

The largest market where existing securities are sold is called the ________ market.

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

Smart investors can find investments that generate high rates of returns with small amounts of risk.

You can estimate the amount by which your wealth will increase from an investment using

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

Which one thing do you always have with common stock?

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

The stocks of well-known companies are referred to as "preferred stock."

Which of the following ranges of returns would indicate a less risky,more stable investment?

The primary market is used by firms to raise funds and is a market where newly issued securities are traded.

In the secondary market,stock prices are

What would be the return on 200 shares of stock purchased on January 1,2016 for $60 per share and sold on December 31,2016 at $80 per share? Also assume that the company paid dividends of $2 per share over the year.The prices include all brokerage fees.Round to the nearest whole percent.

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

If you have $1,000 to invest,but will need the money in one month to pay bills,you should