Question 1

Security investors incur varying degrees of risk.Business risk is related to:

Accepted Answer

A)  price level changes in the economy. 
B)  investor behavior in the market. 
C)  the debt-to-equity ratio of the firm. 
D)  the potential success or failure of the firm. 
E)  security price fluctuations. 
A)  price level changes in the economy. 
B)  investor behavior in the market. 
C)  the debt-to-equity ratio of the firm. 
D)  the potential success or failure of the firm. 
E)  security price fluctuations.

Question 2

Tech stocks represent stocks in the technology and utility sectors.

Accepted Answer

A) True 
 B)False

Question 3

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

Accepted Answer

A) True 
 B)False

Question 4

The _____ of a stock reflects stockholder confidence.

Accepted Answer

A)  par value 
B)  book value 
C)  face value 
D)  price/earnings ratio 
E)  dividend yield 
A)  par value 
B)  book value 
C)  face value 
D)  price/earnings ratio 
E)  dividend yield

Question 5

If the current price of an investment increases,what affect does the price increase have on approximate yield?

Accepted Answer

A)  Moderately increase yield 
B)  Decrease yield 
C)  Will not affect the yield 
D)  Drastically increase yield 
E)  None of the above 
A)  Moderately increase yield 
B)  Decrease yield 
C)  Will not affect the yield 
D)  Drastically increase yield 
E)  None of the above

Question 6

Stocks with high betas will have larger price gains but lower price declines than those with low betas.

Accepted Answer

A) True 
 B)False

Question 7

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:

Accepted Answer

A)  $2.00 per share. 
B)  $4.30 per share. 
C)  $4.10 per share. 
D)  $1.50 per share. 
E)  none of the above 
A)  $2.00 per share. 
B)  $4.30 per share. 
C)  $4.10 per share. 
D)  $1.50 per share. 
E)  none of the above

Question 8

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 premium,its yield to maturity will be [higher | lower] than the coupon yield.

Accepted Answer

The answer of Choose the word or phrase in [...

Question 9

One of the more appealing features of a common stock is that stock investments:

Accepted Answer

A)  offer ownership with a limited liability. 
B)  offer relatively high annual interest. 
C)  can always be sold for at least the purchase price. 
D)  have a relatively high minimum investment. 
E)  offer tax-exempt income. 
A)  offer ownership with a limited liability. 
B)  offer relatively high annual interest. 
C)  can always be sold for at least the purchase price. 
D)  have a relatively high minimum investment. 
E)  offer tax-exempt income.

Question 10

Recovery of principal and capital gain are elements of total return.

Accepted Answer

A) True 
 B)False

Question 11

Pulling money out of the market exposes you to the significant risk that you'll miss the months of good returns that could help you recoup prior losses.

Accepted Answer

A) True 
 B)False

Question 12

A bond with a yield to maturity that equaled or exceeded an investor's desired rate of return is considered an attractive investment.

Accepted Answer

A) True 
 B)False

Question 13

Preferred stock can be exchanged for common stock.

Accepted Answer

A) True 
 B)False

Question 14

Convertible preferred stock can be exchanged for common stock.

Accepted Answer

A) True 
 B)False

Question 15

Common stocks pay a guaranteed dividend each year.

Accepted Answer

A) True 
 B)False

Question 16

Bondholders will receive interest payments after the stockholders receive dividends.

Accepted Answer

A) True 
 B)False

Question 17

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.
-Stock dividends represent [taxable | nontaxable] income.

Accepted Answer

The answer of Choose the word or phrase in [...

Question 18

When interest rates rise,bond prices will:

Accepted Answer

A)  return to a steady price. 
B)  rise. 
C)  fall. 
D)  vary unpredictably. 
E)  not be affected. 
A)  return to a steady price. 
B)  rise. 
C)  fall. 
D)  vary unpredictably. 
E)  not be affected.

Question 19

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 longer money is not invested during an economic boom,the [higher | lower] is the percent return.

Accepted Answer

The answer of Choose the word or phrase in [...

Question 20

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.
-When a bond is sold between coupon payment dates,the [buyer pays the seller | seller pays the buyer] for the accrued interest.

Accepted Answer

The answer of Choose the word or phrase in [...

Security investors incur varying degrees of risk.Business risk is related to:

Tech stocks represent stocks in the technology and utility sectors.

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

The _____ of a stock reflects stockholder confidence.

If the current price of an investment increases,what affect does the price increase have on approximate yield?

Stocks with high betas will have larger price gains but lower price declines than those with low betas.

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:

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 premium,its yield to maturity will be [higher | lower] than the coupon yield.

One of the more appealing features of a common stock is that stock investments:

Recovery of principal and capital gain are elements of total return.

Pulling money out of the market exposes you to the significant risk that you'll miss the months of good returns that could help you recoup prior losses.

A bond with a yield to maturity that equaled or exceeded an investor's desired rate of return is considered an attractive investment.

Preferred stock can be exchanged for common stock.

Convertible preferred stock can be exchanged for common stock.

Common stocks pay a guaranteed dividend each year.

Bondholders will receive interest payments after the stockholders receive dividends.

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. -Stock dividends represent [taxable | nontaxable] income.

When interest rates rise,bond prices will:

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 longer money is not invested during an economic boom,the [higher | lower] is the percent return.

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

Security investors incur varying degrees of risk.Business risk is related to:

Tech stocks represent stocks in the technology and utility sectors.

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

The _____ of a stock reflects stockholder confidence.

If the current price of an investment increases,what affect does the price increase have on approximate yield?

Stocks with high betas will have larger price gains but lower price declines than those with low betas.

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:

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 premium,its yield to maturity will be [higher | lower] than the coupon yield.

One of the more appealing features of a common stock is that stock investments:

Recovery of principal and capital gain are elements of total return.

Pulling money out of the market exposes you to the significant risk that you'll miss the months of good returns that could help you recoup prior losses.

A bond with a yield to maturity that equaled or exceeded an investor's desired rate of return is considered an attractive investment.

Preferred stock can be exchanged for common stock.

Convertible preferred stock can be exchanged for common stock.

Common stocks pay a guaranteed dividend each year.

Bondholders will receive interest payments after the stockholders receive dividends.

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. -Stock dividends represent [taxable | nontaxable] income.

When interest rates rise,bond prices will:

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 longer money is not invested during an economic boom,the [higher | lower] is the percent return.

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