Question 1

Which of the following techniques is regarded as fundamental analysis?

Accepted Answer

A) Study of the firm's revenue and earnings 
B) Study of the firm's stock price history 
C) Study of the firm's recent change in management 
D) Study of the firm's commentary by the financial news 
A) Study of the firm's revenue and earnings 
B) Study of the firm's stock price history 
C) Study of the firm's recent change in management 
D) Study of the firm's commentary by the financial news A

Question 2

If you wish to evaluate the financial leverage of a firm,you could look at the

Accepted Answer

A) short-term liabilities versus assets. 
B) long-term liabilities versus total assets. 
C) gross revenue versus total assets. 
D) long-term debt versus total equity. 
A) short-term liabilities versus assets. 
B) long-term liabilities versus total assets. 
C) gross revenue versus total assets. 
D) long-term debt versus total equity. B

Question 3

You bought IBM stock at $70 per share.It is now $120 a share.You think it could go higher but you are nervous that it could go down and you would lose your gains.To protect your gains but still give yourself the chance to make future profits,you could place a

Accepted Answer

A) limit order to sell for $130 a share. 
B) sell stop order at $110 a share. 
C) limit order to sell for $110 a share. 
D) sell stop order at $130 a share. 
A) limit order to sell for $130 a share. 
B) sell stop order at $110 a share. 
C) limit order to sell for $110 a share. 
D) sell stop order at $130 a share. B

Question 4

A high times-interest-earned ratio means that the firm should be more capable of covering its debt payments.

Accepted Answer

A) True 
 B)False

Question 5

Stocks would be most favourably affected by

Accepted Answer

A) a decline in interest rates and a decline in inflation. 
B) an increase in interest rates and a decline in inflation. 
C) a decline in interest rates and an increase in inflation. 
D) an increase in interest rates and an increase in inflation. 
A) a decline in interest rates and a decline in inflation. 
B) an increase in interest rates and a decline in inflation. 
C) a decline in interest rates and an increase in inflation. 
D) an increase in interest rates and an increase in inflation.

Question 6

A brokerage firm currently limits the margin rate to 70 percent.The amount that can be borrowed for a transaction to buy 100 shares at $50 is

Accepted Answer

A) $4000. 
B) $3500. 
C) $5000. 
D) $1500. 
A) $4000. 
B) $3500. 
C) $5000. 
D) $1500.

Question 7

When the federal government fiscal policy moves to increases taxes,these revenues would generally be used to stimulate economic growth.

Accepted Answer

A) True 
 B)False

Question 8

What is the fair market value of a preferred share that pays $2.25 in dividends per year when long-term government bond yield is 5.42 percent annually?

Accepted Answer

This is essentially the present value of

Question 9

You want to purchase 100 shares of CIB for a maximum price of $3000 and it is currently trading at $33.Which order should you place?

Accepted Answer

A) A buy stop order to purchase 100 shares of CIB at $30 good until filled 
B) A limit order to buy 100 shares of CIB at $30 good until filled 
C) A market order to buy 100 shares of CIB at $30 
D) A market order to purchase 100 shares of CIB at $33 
A) A buy stop order to purchase 100 shares of CIB at $30 good until filled 
B) A limit order to buy 100 shares of CIB at $30 good until filled 
C) A market order to buy 100 shares of CIB at $30 
D) A market order to purchase 100 shares of CIB at $33

Question 10

To evaluate the liquidity of a firm,you should look at the

Accepted Answer

A) current ratio. 
B) debt ratio. 
C) inventory turnover. 
D) return on net assets. 
A) current ratio. 
B) debt ratio. 
C) inventory turnover. 
D) return on net assets.

Question 11

Which are the main Canadian stock exchanges?

Accepted Answer

A) TSX,TSX Venture Exchange and Montreal Exchange 
B) TSX,NASDAQ,and Montreal Exchange 
C) TSX,TSX Venture Exchange and Canadian OTC 
D) TSE,NASDAQ and Canadian OTC 
A) TSX,TSX Venture Exchange and Montreal Exchange 
B) TSX,NASDAQ,and Montreal Exchange 
C) TSX,TSX Venture Exchange and Canadian OTC 
D) TSE,NASDAQ and Canadian OTC

Question 12

When using a sell stop order to sell 100 shares of ABCO at $30,it could happen that you only get $2500 for the transaction.

Accepted Answer

A) True 
 B)False

Question 13

If John executes a buy order to take place when the stock price of ABC Ltd.falls to $10,it is a(n)

Accepted Answer

A) on-stop order. 
B) limit buy order. 
C) buy stop order. 
D) sell stop order. 
A) on-stop order. 
B) limit buy order. 
C) buy stop order. 
D) sell stop order.

Question 14

Limit orders are always preferable to market orders.

Accepted Answer

A) True 
 B)False

Question 15

How much should a share of stock be worth for a firm whose earnings per share are $4 if the industry's average P/E is 11?

Accepted Answer

A) $40 
B) $44 
C) $48 
D) $88 
A) $40 
B) $44 
C) $48 
D) $88

Question 16

A stock with a low P/E ratio compared with its peers means it is a good value using fundamental analysis.

Accepted Answer

A) True 
 B)False

Question 17

Which of the following methods is used most commonly to value stock?

Accepted Answer

A) Price-earnings method 
B) Price-revenue method 
C) General evaluation of the economy and industry 
D) Technical analysis 
A) Price-earnings method 
B) Price-revenue method 
C) General evaluation of the economy and industry 
D) Technical analysis

Question 18

A margin call is a request from a brokerage firm for the investor to increase the cash in the account in order to bring the margin back up to the minimum level.

Accepted Answer

A) True 
 B)False

Question 19

How many shares of TIC could you purchase on margin if you have $6000? The market price is $20 and the margin requirement is 30 percent.

Accepted Answer

A) 900 shares 
B) 300 shares 
C) 1000 shares 
D) 428 shares 
A) 900 shares 
B) 300 shares 
C) 1000 shares 
D) 428 shares

Question 20

One of the most commonly used measures of inflation is the

Accepted Answer

A) gross domestic product. 
B) fiscal policy. 
C) consumer price index. 
D) inflation factor. 
A) gross domestic product. 
B) fiscal policy. 
C) consumer price index. 
D) inflation factor.

Which of the following techniques is regarded as fundamental analysis?

If you wish to evaluate the financial leverage of a firm,you could look at the

You bought IBM stock at $70 per share.It is now $120 a share.You think it could go higher but you are nervous that it could go down and you would lose your gains.To protect your gains but still give yourself the chance to make future profits,you could place a

A high times-interest-earned ratio means that the firm should be more capable of covering its debt payments.

Stocks would be most favourably affected by

A brokerage firm currently limits the margin rate to 70 percent.The amount that can be borrowed for a transaction to buy 100 shares at $50 is

When the federal government fiscal policy moves to increases taxes,these revenues would generally be used to stimulate economic growth.

What is the fair market value of a preferred share that pays $2.25 in dividends per year when long-term government bond yield is 5.42 percent annually?

You want to purchase 100 shares of CIB for a maximum price of $3000 and it is currently trading at $33.Which order should you place?

To evaluate the liquidity of a firm,you should look at the

Which are the main Canadian stock exchanges?

When using a sell stop order to sell 100 shares of ABCO at $30,it could happen that you only get $2500 for the transaction.

If John executes a buy order to take place when the stock price of ABC Ltd.falls to $10,it is a(n)

Limit orders are always preferable to market orders.

How much should a share of stock be worth for a firm whose earnings per share are $4 if the industry's average P/E is 11?

A stock with a low P/E ratio compared with its peers means it is a good value using fundamental analysis.

Which of the following methods is used most commonly to value stock?

A margin call is a request from a brokerage firm for the investor to increase the cash in the account in order to bring the margin back up to the minimum level.

How many shares of TIC could you purchase on margin if you have $6000? The market price is $20 and the margin requirement is 30 percent.

One of the most commonly used measures of inflation is the

Tools for Financial Planning - Applying Time Value Concepts

Tools for Financial Planning - Planning with Personal Financial Statements

Tools for Financial Planning - Using Tax Concepts for Planning

Managing Your Financial Resources - Banking Services and Managing Your Money

Managing Your Financial Resources - Assessing,Managing and Securing Your Credit

Managing Your Financial Resources - Purchasing and Financing a Home

Protecting Your Wealth - Auto and Homeowner's Insurance

Protecting Your Wealth - Health and Life Insurance

Personal Investing - Investing Fundamentals

Personal Investing - Investing in Bonds

Personal Investing - Investing in Mutual Funds

Retirement and Estate Planning - Retirement Planning

Retirement and Estate Planning - Estate Planning

Synthesis of Financial Planning - Integrating the Components of a Financial Plan

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Exam 4: Personal Investing - Investing in Stocks

Which of the following techniques is regarded as fundamental analysis?

If you wish to evaluate the financial leverage of a firm,you could look at the

You bought IBM stock at $70 per share.It is now $120 a share.You think it could go higher but you are nervous that it could go down and you would lose your gains.To protect your gains but still give yourself the chance to make future profits,you could place a

A high times-interest-earned ratio means that the firm should be more capable of covering its debt payments.

Stocks would be most favourably affected by

A brokerage firm currently limits the margin rate to 70 percent.The amount that can be borrowed for a transaction to buy 100 shares at $50 is

When the federal government fiscal policy moves to increases taxes,these revenues would generally be used to stimulate economic growth.

What is the fair market value of a preferred share that pays $2.25 in dividends per year when long-term government bond yield is 5.42 percent annually?

You want to purchase 100 shares of CIB for a maximum price of $3000 and it is currently trading at $33.Which order should you place?

To evaluate the liquidity of a firm,you should look at the

Which are the main Canadian stock exchanges?

When using a sell stop order to sell 100 shares of ABCO at $30,it could happen that you only get $2500 for the transaction.

If John executes a buy order to take place when the stock price of ABC Ltd.falls to $10,it is a(n)

Limit orders are always preferable to market orders.

How much should a share of stock be worth for a firm whose earnings per share are $4 if the industry's average P/E is 11?

A stock with a low P/E ratio compared with its peers means it is a good value using fundamental analysis.

Which of the following methods is used most commonly to value stock?

A margin call is a request from a brokerage firm for the investor to increase the cash in the account in order to bring the margin back up to the minimum level.

How many shares of TIC could you purchase on margin if you have $6000? The market price is $20 and the margin requirement is 30 percent.

One of the most commonly used measures of inflation is the

Tools for Financial Planning - Applying Time Value Concepts

Tools for Financial Planning - Planning with Personal Financial Statements

Tools for Financial Planning - Using Tax Concepts for Planning

Managing Your Financial Resources - Banking Services and Managing Your Money

Managing Your Financial Resources - Assessing,Managing and Securing Your Credit

Managing Your Financial Resources - Purchasing and Financing a Home

Protecting Your Wealth - Auto and Homeowner's Insurance

Protecting Your Wealth - Health and Life Insurance

Personal Investing - Investing Fundamentals

Personal Investing - Investing in Bonds

Personal Investing - Investing in Mutual Funds

Retirement and Estate Planning - Retirement Planning

Retirement and Estate Planning - Estate Planning

Synthesis of Financial Planning - Integrating the Components of a Financial Plan

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