Question 1

If your portfolio is very diversified then the beta is of no use to you.

Accepted Answer

A) True 
 B)False

Question 2

A stock market index is a measure of the performance of a group of stocks that represent the market or a sector of the market.

Accepted Answer

A) True 
 B)False

Question 3

A proxy is a legal agreement a stockholder signs to allow someone else to vote for him or her at the corporation's annual meeting.

Accepted Answer

A) True 
 B)False

Question 4

Income stocks pay relatively low dividends,and offer a high potential for capital appreciation.

Accepted Answer

A) True 
 B)False

Question 5

When the economy slumps,the earnings of cyclical stocks drop;when the economy recovers,so do their earnings.

Accepted Answer

A) True 
 B)False

Question 6

As a shareholder in Titanic Shipping,Inc. ,James Blue is one of the many actual owners.In case of the bankruptcy of the corporation,his liability would be limited to

Accepted Answer

A) his ownership percentage of the actual loss. 
B) the amount of his investment. 
C) nothing at all. 
D) what is left after selling the stock and subtracting the debt. 
A) his ownership percentage of the actual loss. 
B) the amount of his investment. 
C) nothing at all. 
D) what is left after selling the stock and subtracting the debt.

Question 7

Using time value of money tools to value stock based on the present value of expected future cash flows is called

Accepted Answer

A) P/E ratio. 
B) fundamental analysis. 
C) technical analysis. 
D) SWOT analysis. 
A) P/E ratio. 
B) fundamental analysis. 
C) technical analysis. 
D) SWOT analysis.

Question 8

Proctor and Gamble is an example of a blue-chip stock.

Accepted Answer

A) True 
 B)False

Question 9

Brenda is a 25 year old investor who recently graduated from college and has a successful career,which type of stock should represent a good portion of her portfolio?

Accepted Answer

A) Growth stocks 
B) Defensive stocks 
C) Income stocks 
D) Risk-free stocks 
A) Growth stocks 
B) Defensive stocks 
C) Income stocks 
D) Risk-free stocks

Question 10

Your dad said that he was curious to know why there is so much fluctuation in the value of common stocks.In 1997 the prospects for Sun Industries became more uncertain and investors began to view it as a more risky investment than they had previously.To compensate for this added risk,investors increased their required rate of return on Sun Industries stock,resulting in a decline in its market value.This explains the factor of

Accepted Answer

A) earnings growth and stock valuation. 
B) interest rates and stock valuation. 
C) risk and stock valuation. 
D) supply and demand. 
E) dividend strength and stock valuation. 
A) earnings growth and stock valuation. 
B) interest rates and stock valuation. 
C) risk and stock valuation. 
D) supply and demand. 
E) dividend strength and stock valuation.

Question 11

Your father-in-law's stockbroker examines future earnings and dividends,the expected level of interest rates,and the firm's risk to provide a basis for buy-sell recommendations.This stockbroker uses the ________ approach to stock valuation.

Accepted Answer

A) financial statement analysis 
B) earnings analysis 
C) expectations method 
D) fundamental analysis 
E) none of the above 
A) financial statement analysis 
B) earnings analysis 
C) expectations method 
D) fundamental analysis 
E) none of the above

Question 12

Berkshire Hathaway's "A" stock has never split.As a result,in spring of 2017 one share of the stock was selling at a price of more than $266,000 per share.

Accepted Answer

A) True 
 B)False

Question 13

Louise Rogers knows that several factors affect the price of a share of common stock.The one that says there is an inverse relationship between interest rates and the value of a share of common stock is the ________ factor.

Accepted Answer

A) risk and stock valuation 
B) interest rates and stock valuation 
C) earnings growth and stock valuation 
D) interest rates and risk valuation 
E) interest rates and earnings growth valuation 
A) risk and stock valuation 
B) interest rates and stock valuation 
C) earnings growth and stock valuation 
D) interest rates and risk valuation 
E) interest rates and earnings growth valuation

Question 14

Dividends

Accepted Answer

A) are always paid,regardless of the company's profitability. 
B) are always paid when the company makes a profit. 
C) are never paid to common stockholders;only preferred stockholders receive them. 
D) None of the above is true. 
A) are always paid,regardless of the company's profitability. 
B) are always paid when the company makes a profit. 
C) are never paid to common stockholders;only preferred stockholders receive them. 
D) None of the above is true.

Question 15

The S&P 500 better represents movement in the overall market better than the DJIA mainly because of its?

Accepted Answer

A) Depth 
B) Breadth 
C) Indexing 
D) Reporting 
A) Depth 
B) Breadth 
C) Indexing 
D) Reporting

Question 16

You have just discovered one reason not to invest in stocks.What do you think it is?

Accepted Answer

A) Stocks reduce risk through diversification. 
B) Your tolerance of risk is low. 
C) Over time,common stocks outperform all other investments. 
D) Stocks are liquid. 
E) Growth is determined by more than just interest rates. 
A) Stocks reduce risk through diversification. 
B) Your tolerance of risk is low. 
C) Over time,common stocks outperform all other investments. 
D) Stocks are liquid. 
E) Growth is determined by more than just interest rates.

Question 17

A stock market characterized by ________ prices is termed a bear market.

Accepted Answer

A) falling 
B) rising 
C) steady 
D) none of the above 
A) falling 
B) rising 
C) steady 
D) none of the above

Question 18

Common stockholders are entitled to elect the company's board of directors.Usually one share of stock is equal to ________ vote(s).

Accepted Answer

A) one 
B) two 
C) 100 
D) 1,000 
A) one 
B) two 
C) 100 
D) 1,000

Question 19

Because the Dow Jones Index Average is based on the movement of only ________ large,well-established stocks,many investors believe it reflects price movements for large firms rather than for the general market.

Accepted Answer

A) 30 
B) 50 
C) 100 
D) 500 
A) 30 
B) 50 
C) 100 
D) 500

Question 20

Discuss three reasons why dollar-cost averaging is an important concept to investors.

Accepted Answer

If you buy stock over an extended period

If your portfolio is very diversified then the beta is of no use to you.

A stock market index is a measure of the performance of a group of stocks that represent the market or a sector of the market.

A proxy is a legal agreement a stockholder signs to allow someone else to vote for him or her at the corporation's annual meeting.

Income stocks pay relatively low dividends,and offer a high potential for capital appreciation.

When the economy slumps,the earnings of cyclical stocks drop;when the economy recovers,so do their earnings.

As a shareholder in Titanic Shipping,Inc. ,James Blue is one of the many actual owners.In case of the bankruptcy of the corporation,his liability would be limited to

Using time value of money tools to value stock based on the present value of expected future cash flows is called

Proctor and Gamble is an example of a blue-chip stock.

Brenda is a 25 year old investor who recently graduated from college and has a successful career,which type of stock should represent a good portion of her portfolio?

Your father-in-law's stockbroker examines future earnings and dividends,the expected level of interest rates,and the firm's risk to provide a basis for buy-sell recommendations.This stockbroker uses the ________ approach to stock valuation.

Berkshire Hathaway's "A" stock has never split.As a result,in spring of 2017 one share of the stock was selling at a price of more than $266,000 per share.

Louise Rogers knows that several factors affect the price of a share of common stock.The one that says there is an inverse relationship between interest rates and the value of a share of common stock is the ________ factor.

Dividends

The S&P 500 better represents movement in the overall market better than the DJIA mainly because of its?

You have just discovered one reason not to invest in stocks.What do you think it is?

A stock market characterized by ________ prices is termed a bear market.

Common stockholders are entitled to elect the company's board of directors.Usually one share of stock is equal to ________ vote(s).

Because the Dow Jones Index Average is based on the movement of only ________ large,well-established stocks,many investors believe it reflects price movements for large firms rather than for the general market.

Discuss three reasons why dollar-cost averaging is an important concept to investors.

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

If your portfolio is very diversified then the beta is of no use to you.

A stock market index is a measure of the performance of a group of stocks that represent the market or a sector of the market.

A proxy is a legal agreement a stockholder signs to allow someone else to vote for him or her at the corporation's annual meeting.

Income stocks pay relatively low dividends,and offer a high potential for capital appreciation.

When the economy slumps,the earnings of cyclical stocks drop;when the economy recovers,so do their earnings.

As a shareholder in Titanic Shipping,Inc. ,James Blue is one of the many actual owners.In case of the bankruptcy of the corporation,his liability would be limited to

Using time value of money tools to value stock based on the present value of expected future cash flows is called

Proctor and Gamble is an example of a blue-chip stock.

Brenda is a 25 year old investor who recently graduated from college and has a successful career,which type of stock should represent a good portion of her portfolio?

Your father-in-law's stockbroker examines future earnings and dividends,the expected level of interest rates,and the firm's risk to provide a basis for buy-sell recommendations.This stockbroker uses the ________ approach to stock valuation.

Berkshire Hathaway's "A" stock has never split.As a result,in spring of 2017 one share of the stock was selling at a price of more than $266,000 per share.

Louise Rogers knows that several factors affect the price of a share of common stock.The one that says there is an inverse relationship between interest rates and the value of a share of common stock is the ________ factor.

Dividends

The S&P 500 better represents movement in the overall market better than the DJIA mainly because of its?

You have just discovered one reason not to invest in stocks.What do you think it is?

A stock market characterized by ________ prices is termed a bear market.

Common stockholders are entitled to elect the company's board of directors.Usually one share of stock is equal to ________ vote(s).

Because the Dow Jones Index Average is based on the movement of only ________ large,well-established stocks,many investors believe it reflects price movements for large firms rather than for the general market.

Discuss three reasons why dollar-cost averaging is an important concept to investors.

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