Exam 4: Personal Investing - Investing in Stocks

What is the appropriate time for someone to invest in the stock market and when should the investment be moved to safer vehicles? Do you believe you have enough knowledge to invest in the stock market? Why or why not? How would you assess your success?

The price-earnings method used to value stock is limited because it assumes that the firm has the same P/E ratio as its competitors.

Which of the following factors would contribute to an increase in stock prices?

Which of the following is not a typical way to analyze firm-specific characteristics through financial statements?

Company's with lower P/E ratios are usually better long term investments than those with higher P/E ratios.

What can be said about broker and analyst recommendations?

You purchased stock worth $10 000 on margin (50 percent).Now the value of your stock has declined to $7000 and you receive a margin call.How much cash do you need to bring the margin back to the minimum level?

The TSX Index had a return of 12 percent and Apple Inc.had a return of two percent over the same six month period.What can you say about whether your purchase of Apple Inc.was a good decision?

A firm's financial leverage indicates its reliance on debt to support its operations.

A stock purchase of 100 shares of CN at $30 per share requiring a 30% margin means you would need $900 cash to make the purchase.

In deciding to invest in stocks,the most time-consuming Chapter is

What additional risk is involved when buying stock on margin?

A discount brokerage firm executes transactions and provides investment advice at a price less than that of full-service brokers.

To assess the performance of your purchase of TD Bank stock,which index would be the most relevant?

When you buy a stock on margin,your return is magnified if the stock goes up in value.

If stock markets are inefficient

If IIROC limits the margin on a stock to 70 percent,initially how much money would you need to personally invest to purchase $10000 worth of BMO stock?

Inflation is the measure of the increase in the general level of prices of products and services over a specified period.

Explain,with several examples,the concept of fundamental analysis and all of its potential components.

The risk of a market order is that you could pay more for a stock than you anticipated.