Question 1

The dividend yield on a share of common stock is

Accepted Answer

A) available at most large companies. 
B) the amount of annual dividends divided by the market price of the stock. 
C) the taxes you pay on the reinvested dividends. 
D) all of the above. 
E) only A and B. 
A) available at most large companies. 
B) the amount of annual dividends divided by the market price of the stock. 
C) the taxes you pay on the reinvested dividends. 
D) all of the above. 
E) only A and B.

Question 2

In SWOT analysis,the T stands for

Accepted Answer

A) threats. 
B) time. 
C) technical. 
D) taxes. 
A) threats. 
B) time. 
C) technical. 
D) taxes.

Question 3

A proxy vote means

Accepted Answer

A) filling out a voting form and having a representative turn it in for you. 
B) requesting that your vote be deferred until a later date. 
C) giving a representative the right to vote in your place. 
D) none of the above. 
A) filling out a voting form and having a representative turn it in for you. 
B) requesting that your vote be deferred until a later date. 
C) giving a representative the right to vote in your place. 
D) none of the above.

Question 4

Beta measures

Accepted Answer

A) return. 
B) price. 
C) risk. 
D) quality. 
A) return. 
B) price. 
C) risk. 
D) quality.

Question 5

A stock market characterized by increasing prices is termed a(n)________ market.

Accepted Answer

A) bull 
B) bear 
C) animal 
D) none of the above 
A) bull 
B) bear 
C) animal 
D) none of the above

Question 6

You are really keen on stocks.However,you do not like stocks with regard to ________.This means that if a company you have invested in goes bankrupt,the creditors are paid first and you will be out of luck.

Accepted Answer

A) claim on income 
B) limited liability 
C) claims on assets 
D) voting rights 
E) claims on dividends 
A) claim on income 
B) limited liability 
C) claims on assets 
D) voting rights 
E) claims on dividends

Question 7

For investors with a long time in front of them,market volatility is not of great concern today.

Accepted Answer

A) True 
 B)False

Question 8

Your friend has recommended that you purchase stock in company XYZ.It is expected to pay a $4 dividend,and has historically grown at 5%.If the required rate of return is 12%,what is the estimated value of a share of XYZ stock?

Accepted Answer

A) $23.53 
B) $33.34 
C) $57.14 
D) $80.00 
A) $23.53 
B) $33.34 
C) $57.14 
D) $80.00

Question 9

Limited liability associated with stock ownership means that shareholders can only lose the amount of money they have invested in the company.

Accepted Answer

A) True 
 B)False

Question 10

Explain the common stock features and rights as though you are speaking to a novice.

Accepted Answer

Common stocks have limited liability;tha

Question 11

The ratio of the annual dividend to the market price of the stock is called the

Accepted Answer

A) retention ratio. 
B) plowback ratio. 
C) current ratio. 
D) dividend yield. 
E) none of the above. 
A) retention ratio. 
B) plowback ratio. 
C) current ratio. 
D) dividend yield. 
E) none of the above.

Question 12

What action results in fewer shares outstanding,so remaining shareholders own a larger proportion of the company?

Accepted Answer

A) Stock split 
B) Stock repurchase 
C) Proxy 
D) Declaration date 
A) Stock split 
B) Stock repurchase 
C) Proxy 
D) Declaration date

Question 13

Berkshire Hathaway's "A" stock has never split.As a result,in mid-2017 one share of its stock was selling at a price of more than ________ per share.

Accepted Answer

A) $190 
B) $1,900 
C) $19,000 
D) $266,000 
A) $190 
B) $1,900 
C) $19,000 
D) $266,000

Question 14

Using the stock valuation formula calculate the value of a share of stock if it is expected to pay $5 in dividends,in addition the dividends are expected to grow at a rate of 4 percent forever,and the investor's required rate of return is 12 percent.

Accepted Answer

A) $18.75 
B) $39.75 
C) $62.50 
D) $68.50 
A) $18.75 
B) $39.75 
C) $62.50 
D) $68.50

Question 15

The book value of a company is calculated by

Accepted Answer

A) adding the price per share to the dividends paid. 
B) subtracting its price per share from the dividends paid. 
C) subtracting the value of all the firm's assets from the value of its liabilities. 
D) subtracting the value of all the firm's liabilities from the book value of its assets. 
A) adding the price per share to the dividends paid. 
B) subtracting its price per share from the dividends paid. 
C) subtracting the value of all the firm's assets from the value of its liabilities. 
D) subtracting the value of all the firm's liabilities from the book value of its assets.

Question 16

Jessica wanted to gauge stock performance in general.She found a useful tool that measured the stock prices of 30 large industrial firms,called the

Accepted Answer

A) Dow Jones Industrial Average. 
B) Standard & Poor's Index. 
C) Value Line Survey. 
D) Moody's Index. 
E) none of the above. 
A) Dow Jones Industrial Average. 
B) Standard & Poor's Index. 
C) Value Line Survey. 
D) Moody's Index. 
E) none of the above.

Question 17

A firm may decide that the price per share for its stock is getting too high for the smaller investor so the company "splits the stock."

Accepted Answer

A) True 
 B)False

Question 18

What are the three factors that explain why stock values fluctuate?

Accepted Answer

As the stock's risk increases,so does th

Question 19

A stock currently selling for $105 with estimated earnings per share of $5.25 would have a P/E ratio of

Accepted Answer

A) 10. 
B) 12. 
C) 20. 
D) 28. 
E) 30. 
A) 10. 
B) 12. 
C) 20. 
D) 28. 
E) 30.

Question 20

Capital appreciation refers to an increase in the selling price of your shares of stock.

Accepted Answer

A) True 
 B)False

The dividend yield on a share of common stock is

In SWOT analysis,the T stands for

A proxy vote means

Beta measures

A stock market characterized by increasing prices is termed a(n)________ market.

You are really keen on stocks.However,you do not like stocks with regard to ________.This means that if a company you have invested in goes bankrupt,the creditors are paid first and you will be out of luck.

For investors with a long time in front of them,market volatility is not of great concern today.

Your friend has recommended that you purchase stock in company XYZ.It is expected to pay a $4 dividend,and has historically grown at 5%.If the required rate of return is 12%,what is the estimated value of a share of XYZ stock?

Limited liability associated with stock ownership means that shareholders can only lose the amount of money they have invested in the company.

Explain the common stock features and rights as though you are speaking to a novice.

The ratio of the annual dividend to the market price of the stock is called the

What action results in fewer shares outstanding,so remaining shareholders own a larger proportion of the company?

Berkshire Hathaway's "A" stock has never split.As a result,in mid-2017 one share of its stock was selling at a price of more than ________ per share.

Using the stock valuation formula calculate the value of a share of stock if it is expected to pay $5 in dividends,in addition the dividends are expected to grow at a rate of 4 percent forever,and the investor's required rate of return is 12 percent.

The book value of a company is calculated by

Jessica wanted to gauge stock performance in general.She found a useful tool that measured the stock prices of 30 large industrial firms,called the

A firm may decide that the price per share for its stock is getting too high for the smaller investor so the company "splits the stock."

What are the three factors that explain why stock values fluctuate?

A stock currently selling for $105 with estimated earnings per share of $5.25 would have a P/E ratio of

Capital appreciation refers to an increase in the selling price of your shares of stock.

The Financial Planning Process

Measuring Your Financial Health and Making a Plan

Understanding and Appreciating the Time Value of Money

Tax Planning and Strategies

Cash or Liquid Asset Management

Using Credit Cards: the Role of Open Credit

Student and Consumer Loans: the Role of Planned Borrowing

The Home and Automobile Decision

Life and Health Insurance

Property and Liability Insurance

Investment Basics

Investing in Bonds and Other Alternatives

Mutual Funds: an Easy Way to Diversify

Retirement Planning

Estate Planning: Saving Your Heirs Money and Headaches

Financial Life Eventsfitting the Pieces Together

Filters

Exam 12: Investing in Stocks

The dividend yield on a share of common stock is

In SWOT analysis,the T stands for

A proxy vote means

Beta measures

A stock market characterized by increasing prices is termed a(n)________ market.

You are really keen on stocks.However,you do not like stocks with regard to ________.This means that if a company you have invested in goes bankrupt,the creditors are paid first and you will be out of luck.

For investors with a long time in front of them,market volatility is not of great concern today.

Your friend has recommended that you purchase stock in company XYZ.It is expected to pay a $4 dividend,and has historically grown at 5%.If the required rate of return is 12%,what is the estimated value of a share of XYZ stock?

Limited liability associated with stock ownership means that shareholders can only lose the amount of money they have invested in the company.

Explain the common stock features and rights as though you are speaking to a novice.

The ratio of the annual dividend to the market price of the stock is called the

What action results in fewer shares outstanding,so remaining shareholders own a larger proportion of the company?

Berkshire Hathaway's "A" stock has never split.As a result,in mid-2017 one share of its stock was selling at a price of more than ________ per share.

Using the stock valuation formula calculate the value of a share of stock if it is expected to pay $5 in dividends,in addition the dividends are expected to grow at a rate of 4 percent forever,and the investor's required rate of return is 12 percent.

The book value of a company is calculated by

Jessica wanted to gauge stock performance in general.She found a useful tool that measured the stock prices of 30 large industrial firms,called the

A firm may decide that the price per share for its stock is getting too high for the smaller investor so the company "splits the stock."

What are the three factors that explain why stock values fluctuate?

A stock currently selling for $105 with estimated earnings per share of $5.25 would have a P/E ratio of

Capital appreciation refers to an increase in the selling price of your shares of stock.

The Financial Planning Process

Measuring Your Financial Health and Making a Plan

Understanding and Appreciating the Time Value of Money

Tax Planning and Strategies

Cash or Liquid Asset Management

Using Credit Cards: the Role of Open Credit

Student and Consumer Loans: the Role of Planned Borrowing

The Home and Automobile Decision

Life and Health Insurance

Property and Liability Insurance

Investment Basics

Investing in Bonds and Other Alternatives

Mutual Funds: an Easy Way to Diversify

Retirement Planning

Estate Planning: Saving Your Heirs Money and Headaches

Financial Life Eventsfitting the Pieces Together

Filters