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. -Annual dividends per share divided by market price per share equals [total yield | dividend yield].

The approximate yield-to-maturity of a bond is greater than the stated rate of interest when:

When cash dividends on stock are paid,but the stockholder has these dividends automatically reinvested,what are the federal income tax implications?

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

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. -Changes in the general level of prices within an economy produce [purchasing power risk | interest rate risk].