Question 1

The returns you expect from securities are income and growth.

Accepted Answer

A) True 
 B)False

Question 2

Most companies pay their bondholders cash dividends on a semi-annual basis.

Accepted Answer

A) True 
 B)False

Question 3

A premium bond sells at par value.

Accepted Answer

A) True 
 B)False

Question 4

A bond can be sold:

Accepted Answer

A)  at par value. 
B)  below par value. 
C)  above par value. 
D)  Any of the above 
E)  None of the above 
A)  at par value. 
B)  below par value. 
C)  above par value. 
D)  Any of the above 
E)  None of the above

Question 5

To most stockholders,the main advantages of common stock investment are:

Accepted Answer

A)  attractive returns and active trading. 
B)  guaranteed returns and voting rights. 
C)  high interest and active trading. 
D)  high risk and guaranteed returns. 
E)  high risk and attractive returns. 
A)  attractive returns and active trading. 
B)  guaranteed returns and voting rights. 
C)  high interest and active trading. 
D)  high risk and guaranteed returns. 
E)  high risk and attractive returns.

Question 6

A bond priced at 89 8/32.What is its price?

Accepted Answer

A)  $89.25 
B)  $890.25 
C)  $898.32 
D)  $646.50 
E)  none of the above 
A)  $89.25 
B)  $890.25 
C)  $898.32 
D)  $646.50 
E)  none of the above

Question 7

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 stock market as a whole has a beta of [+1.0 | -1.0].

Accepted Answer

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

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.
-[|Speculative stocks | Growth stocks] are stocks whose earnings and/or market price have consistently increased over time at a rate well above average.

Accepted Answer

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

Question 9

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 safest bond you could purchase would be a [corporate | Treasury] bond.

Accepted Answer

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

Question 10

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.
-A [cyclical | defensive] stock's price would tend to move in the same direction as the entire market.

Accepted Answer

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

Question 11

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

Accepted Answer

A)  They are short-term securities issued by the federal government. 
B)  The interest paid is indexed for inflation. 
C)  The face value of the bond is indexed for inflation. 
D)  The value of the bond can never fall below the face value. 
E)  b and c 
A)  They are short-term securities issued by the federal government. 
B)  The interest paid is indexed for inflation. 
C)  The face value of the bond is indexed for inflation. 
D)  The value of the bond can never fall below the face value. 
E)  b and c

Question 12

One would prefer a stock with steadily increasing earnings per share and return on equity.

Accepted Answer

A) True 
 B)False

Question 13

_____ risk results from the behavior of investors in the securities market.

Accepted Answer

A)  Business 
B)  Financial 
C)  Market 
D)  Purchasing power 
E)  Interest rate 
A)  Business 
B)  Financial 
C)  Market 
D)  Purchasing power 
E)  Interest rate

Question 14

Net profit margin is a key measure of profitability that relates the net profits of a firm to its sales.

Accepted Answer

A) True 
 B)False

Question 15

A characteristic of defensive stocks is:

Accepted Answer

A)  unstable income. 
B)  negative earnings. 
C)  steady dividends during recession. 
D)  zero growth. 
E)  price stability in economic decline. 
A)  unstable income. 
B)  negative earnings. 
C)  steady dividends during recession. 
D)  zero growth. 
E)  price stability in economic decline.

Question 16

Bond return can include both interest and capital gains.

Accepted Answer

A) True 
 B)False

Question 17

The approximate yield to maturity when the average income is $1.00,the average capital gain is $5.00,the average investment is $26.00,and the investment is held for 10 years is:

Accepted Answer

A)  11 percent. 
B)  23 percent. 
C)  27 percent. 
D)  33 percent. 
E)  50 percent. 
A)  11 percent. 
B)  23 percent. 
C)  27 percent. 
D)  33 percent. 
E)  50 percent.

Question 18

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.
-Individuals invest in preferred stock for its high [current income | potential gain].

Accepted Answer

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

Question 19

An example of event risk would be:

Accepted Answer

A)  inflation. 
B)  a corporate takeover. 
C)  a newspaper article about the economy. 
D)  a positive earnings announcements. 
E)  capital growth. 
A)  inflation. 
B)  a corporate takeover. 
C)  a newspaper article about the economy. 
D)  a positive earnings announcements. 
E)  capital growth.

Question 20

Changes in the general level of prices within an economy produce:

Accepted Answer

A)  business risk. 
B)  financial risk. 
C)  market risk. 
D)  purchasing power risk. 
E)  liquidity risk. 
A)  business risk. 
B)  financial risk. 
C)  market risk. 
D)  purchasing power risk. 
E)  liquidity risk.

The returns you expect from securities are income and growth.

Most companies pay their bondholders cash dividends on a semi-annual basis.

A premium bond sells at par value.

A bond can be sold:

To most stockholders,the main advantages of common stock investment are:

A bond priced at 89 8/32.What is its price?

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 stock market as a whole has a beta of [+1.0 | -1.0].

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 safest bond you could purchase would be a [corporate | Treasury] bond.

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. -A [cyclical | defensive] stock's price would tend to move in the same direction as the entire market.

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

One would prefer a stock with steadily increasing earnings per share and return on equity.

_____ risk results from the behavior of investors in the securities market.

Net profit margin is a key measure of profitability that relates the net profits of a firm to its sales.

A characteristic of defensive stocks is:

Bond return can include both interest and capital gains.

The approximate yield to maturity when the average income is $1.00,the average capital gain is $5.00,the average investment is $26.00,and the investment is held for 10 years 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. -Individuals invest in preferred stock for its high [current income | potential gain].

An example of event risk would be:

Changes in the general level of prices within an economy produce:

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

The returns you expect from securities are income and growth.

Most companies pay their bondholders cash dividends on a semi-annual basis.

A premium bond sells at par value.

A bond can be sold:

To most stockholders,the main advantages of common stock investment are:

A bond priced at 89 8/32.What is its price?

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 stock market as a whole has a beta of [+1.0 | -1.0].

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 safest bond you could purchase would be a [corporate | Treasury] bond.

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. -A [cyclical | defensive] stock's price would tend to move in the same direction as the entire market.

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

One would prefer a stock with steadily increasing earnings per share and return on equity.

_____ risk results from the behavior of investors in the securities market.

Net profit margin is a key measure of profitability that relates the net profits of a firm to its sales.

A characteristic of defensive stocks is:

Bond return can include both interest and capital gains.

The approximate yield to maturity when the average income is $1.00,the average capital gain is $5.00,the average investment is $26.00,and the investment is held for 10 years 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. -Individuals invest in preferred stock for its high [current income | potential gain].

An example of event risk would be:

Changes in the general level of prices within an economy produce:

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