Question 1

You received a stock dividend this year instead of cash.This is taxable income.

Accepted Answer

A) True 
 B)False

Question 2

The best returns in the stock market will be achieved by:

Accepted Answer

A)  remaining fully invested. 
B)  missing the five best months. 
C)  missing the ten best months. 
D)  missing the fifteen best months. 
E)  missing the twenty best months. 
A)  remaining fully invested. 
B)  missing the five best months. 
C)  missing the ten best months. 
D)  missing the fifteen best months. 
E)  missing the twenty best months.

Question 3

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 [lower | higher] a bond's rating,the more likely the issuer will default.

Accepted Answer

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

Question 4

Capital appreciation of an investment is a form of current income.

Accepted Answer

A) True 
 B)False

Question 5

Market risk is often measured using:

Accepted Answer

A)  the price/earnings ratio. 
B)  the dividend yield. 
C)  alpha. 
D)  beta. 
E)  none of these 
A)  the price/earnings ratio. 
B)  the dividend yield. 
C)  alpha. 
D)  beta. 
E)  none of these

Question 6

Which of the following investments has the highest liquidity risk?

Accepted Answer

A)  Common stock 
B)  Corporate bonds 
C)  Treasury bonds 
D)  Land 
E)  Mutual fund shares 
A)  Common stock 
B)  Corporate bonds 
C)  Treasury bonds 
D)  Land 
E)  Mutual fund shares

Question 7

Which of the following types of bonds are unsecured?

Accepted Answer

A)  Mortgage bond 
B)  Equipment trust certificate 
C)  Debenture bond 
D)  Agency bond 
E)  All of the above are unsecured 
A)  Mortgage bond 
B)  Equipment trust certificate 
C)  Debenture bond 
D)  Agency bond 
E)  All of the above are unsecured

Question 8

Bonds can be used conservatively by investors seeking current income and aggressively by investors seeking capital gains.

Accepted Answer

A) True 
 B)False

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.
-[Bond | Common stock] prices would be most affected by interest rate risk.

Accepted Answer

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

Question 10

Market risk considers the possibility that the firm may fail.

Accepted Answer

A) True 
 B)False

Question 11

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 lower a stock's beta,the [less | more] volatile you can expect its price fluctuations to be.

Accepted Answer

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

Question 12

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

Accepted Answer

A)  federal bonds. 
B)  agency bonds. 
C)  treasury bonds. 
D)  municipal bonds. 
E)  trust bonds. 
A)  federal bonds. 
B)  agency bonds. 
C)  treasury bonds. 
D)  municipal bonds. 
E)  trust bonds.

Question 13

Calculate the dividend yield on OPQ stock.Earnings per share for a year is $2.75 and the quarterly dividend is 25 cents.The book value is $15.20 per share while the market value is $25.00.

Accepted Answer

Dividend y

Question 14

Common stockholders are considered to be the residual owners of the company.

Accepted Answer

A) True 
 B)False

Question 15

The easiest way to invest in foreign stock is to purchase:

Accepted Answer

A)  the stock directly from an over sea's broker. 
B)  the stock directly from your regular broker. 
C)  the stock directly over the Internet. 
D)  international mutual funds. 
E)  American Depository Receipts. 
A)  the stock directly from an over sea's broker. 
B)  the stock directly from your regular broker. 
C)  the stock directly over the Internet. 
D)  international mutual funds. 
E)  American Depository Receipts.

Question 16

A company with low financial risk are likely to have little to no long-term debt.

Accepted Answer

A) True 
 B)False

Question 17

Purchasing power risk is of least concern during economic recession.

Accepted Answer

A) True 
 B)False

Question 18

There is an inverse relationship between the bond prices and market interest rates.

Accepted Answer

A) True 
 B)False

Question 19

Which of the following statements about preferred stock is true?

Accepted Answer

A)  Preferred shareholders generally get enhanced voting rights. 
B)  Dividends must generally be paid to preferred shareholders before dividends may be paid to common shareholders. 
C)  Preferred stocks are a hybrid between equity and debt,because like common stock the owners of preferred shares can vote and like debt they are paid interest. 
D)  It would be foolish to purchase the common stock of a company that also issues preferred shares,because the preferred shares have a higher yield with a stronger guarantee. 
E)  None of the above are true 
A)  Preferred shareholders generally get enhanced voting rights. 
B)  Dividends must generally be paid to preferred shareholders before dividends may be paid to common shareholders. 
C)  Preferred stocks are a hybrid between equity and debt,because like common stock the owners of preferred shares can vote and like debt they are paid interest. 
D)  It would be foolish to purchase the common stock of a company that also issues preferred shares,because the preferred shares have a higher yield with a stronger guarantee. 
E)  None of the above are true

Question 20

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

Accepted Answer

A)  It is currently selling for a premium. 
B)  It is currently selling at a discount. 
C)  It is currently selling at par. 
D)  The bond is likely to be called. 
E)  None of the above 
A)  It is currently selling for a premium. 
B)  It is currently selling at a discount. 
C)  It is currently selling at par. 
D)  The bond is likely to be called. 
E)  None of the above

You received a stock dividend this year instead of cash.This is taxable income.

The best returns in the stock market will be achieved by:

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 [lower | higher] a bond's rating,the more likely the issuer will default.

Capital appreciation of an investment is a form of current income.

Market risk is often measured using:

Which of the following investments has the highest liquidity risk?

Which of the following types of bonds are unsecured?

Bonds can be used conservatively by investors seeking current income and aggressively by investors seeking capital gains.

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. -[Bond | Common stock] prices would be most affected by interest rate risk.

Market risk considers the possibility that the firm may fail.

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 lower a stock's beta,the [less | more] volatile you can expect its price fluctuations to be.

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

Calculate the dividend yield on OPQ stock.Earnings per share for a year is $2.75 and the quarterly dividend is 25 cents.The book value is $15.20 per share while the market value is $25.00.

Common stockholders are considered to be the residual owners of the company.

The easiest way to invest in foreign stock is to purchase:

A company with low financial risk are likely to have little to no long-term debt.

Purchasing power risk is of least concern during economic recession.

There is an inverse relationship between the bond prices and market interest rates.

Which of the following statements about preferred stock is true?

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

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

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Exam 12: Investing in Stocks and Bonds

You received a stock dividend this year instead of cash.This is taxable income.

The best returns in the stock market will be achieved by:

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 [lower | higher] a bond's rating,the more likely the issuer will default.

Capital appreciation of an investment is a form of current income.

Market risk is often measured using:

Which of the following investments has the highest liquidity risk?

Which of the following types of bonds are unsecured?

Bonds can be used conservatively by investors seeking current income and aggressively by investors seeking capital gains.

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. -[Bond | Common stock] prices would be most affected by interest rate risk.

Market risk considers the possibility that the firm may fail.

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 lower a stock's beta,the [less | more] volatile you can expect its price fluctuations to be.

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

Calculate the dividend yield on OPQ stock.Earnings per share for a year is $2.75 and the quarterly dividend is 25 cents.The book value is $15.20 per share while the market value is $25.00.

Common stockholders are considered to be the residual owners of the company.

The easiest way to invest in foreign stock is to purchase:

A company with low financial risk are likely to have little to no long-term debt.

Purchasing power risk is of least concern during economic recession.

There is an inverse relationship between the bond prices and market interest rates.

Which of the following statements about preferred stock is true?

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

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