Exam 12: Investing in Stocks and Bonds

Choose the word or phrase in [ ] which will correctly complete the statement. Select A for the first item, B for the second item, and C if neither item will correctly complete the statement. -The best way to invest in foreign stocks is to buy [them directly on the foreign exchanges | ADR's].

Choose the word or phrase in [ ] which will correctly complete the statement. Select A for the first item, B for the second item, and C if neither item will correctly complete the statement. -The commonly cited price for a bond is usually its [clean | dirty] bond price.

Monte Jackson is considering the purchase of XYZ stock and would like to estimate its approximate yield if he holds it 5 years.The current price is $20 and Monte expects it would rise to $30 over the 5-year holding period.The expected dividend is $1.00 each year.(Show all work.)

Choose the word or phrase in [ ] which will correctly complete the statement. Select A for the first item, B for the second item, and C if neither item will correctly complete the statement. -[General obligation bonds | revenue bonds] are the least risky municipal bond category.

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

Which of the following is a characteristic of Treasury inflation-indexed bonds?

Only the shares of the strongest,most stable,and safe-return companies can be called

Choose the word or phrase in [ ] which will correctly complete the statement. Select A for the first item, B for the second item, and C if neither item will correctly complete the statement. -Stocks of stable,older companies are called [earnings | blue chip] stocks.

U-Need-This has $12 million liabilities,$12 million preferred stock,10 million shares of common stock outstanding,and $39 million in total assets.The book value is

A characteristic of defensive stocks is

Bonds issued by subdivisions of the U.S.government but not guaranteed by the government are called

The yields on municipal bonds are usually higher than the returns available from fully taxable issues.

The Smith family owns 200 shares of Elta stock.The company declared a 5% stock dividend.The Smiths now own

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

In most investments,there is a risk-return tradeoff.

Choose the word or phrase in [ ] which will correctly complete the statement. Select A for the first item, B for the second item, and C if neither item will correctly complete the statement. -If you buy a bond at a discount,its yield to maturity will be [higher | lower] than the coupon yield.

Choose the word or phrase in [ ] which will correctly complete the statement. Select A for the first item, B for the second item, and C if neither item will correctly complete the statement. -You would expect the higher rate of interest from a bond with a [AAA | C] bond rating.

You would expect more growth with the preferred stock you own than with the common stock in your portfolio.

Choose the word or phrase in [ ] which will correctly complete the statement. Select A for the first item, B for the second item, and C if neither item will correctly complete the statement. -Annual interest income divided by market price of the bond equals [current yield | yield to maturity].

A callable bond may be retired by the issuer prior to maturity.