Question 1

An order to execute a transaction to buy or sell a stock at its prevailing price is called a

Accepted Answer

A) limit order. 
B) stock order. 
C) market order. 
D) good till cancelled order. 
A) limit order. 
B) stock order. 
C) market order. 
D) good till cancelled order.

Question 2

Floor traders no longer exist on the TSX because trades are now handled electronically.

Accepted Answer

A) True 
 B)False

Question 3

Which technique for valuing stocks is used in technical analysis?

Accepted Answer

A) Index comparisons 
B) Price charting 
C) DDM 
D) P/E ratio analysis 
A) Index comparisons 
B) Price charting 
C) DDM 
D) P/E ratio analysis

Question 4

For most firms,having slightly more short-term assets versus short-term liabilities would be considered a reasonable current ratio.

Accepted Answer

A) True 
 B)False

Question 5

The means by which the Canadian government imposes taxes on individuals and corporations and the way it spends tax revenues is the

Accepted Answer

A) tax policy. 
B) fiscal policy. 
C) monetary policy. 
D) budgetary policy. 
A) tax policy. 
B) fiscal policy. 
C) monetary policy. 
D) budgetary policy.

Question 6

Which of the following ratios measures efficiency?

Accepted Answer

A) Times interest earned 
B) Inventory turnover 
C) Return on assets 
D) Return on equity 
A) Times interest earned 
B) Inventory turnover 
C) Return on assets 
D) Return on equity

Question 7

In fundamental research you look for a stock that is

Accepted Answer

A) overvalued. 
B) from a well-known company. 
C) undervalued. 
D) trending upwards. 
A) overvalued. 
B) from a well-known company. 
C) undervalued. 
D) trending upwards.

Question 8

TD Bank pays an annual dividend of $2.12 at the rate of $0.53 quarterly.The stock is trading at $63.21.What is the effective annual yield?

Accepted Answer

A) 3)35 percent 
B) 3)25 percent 
C) 3)60 percent 
D) 0)84 percent 
A) 3)35 percent 
B) 3)25 percent 
C) 3)60 percent 
D) 0)84 percent

Question 9

If you need to be sure to buy shares of a company when the price rises above a certain level,you need to use a

Accepted Answer

A) buy limit order. 
B) buy stop order. 
C) buy market order. 
D) buy price order. 
A) buy limit order. 
B) buy stop order. 
C) buy market order. 
D) buy price order.

Question 10

Discuss investing on margin,illustrating the positives and negatives of this investing technique.Illustrate with a specific example.

Accepted Answer

Investing on margin increases risk and p

Question 11

Market makers are required to help make markets more liquid by taking the same position as those who want to buy or sell the stock.

Accepted Answer

A) True 
 B)False

Question 12

The dividend discount model method is used to value a stock based on a firm's ________ and is ________ at an appropriate rate of interest.

Accepted Answer

A) future dividend payments,compounded 
B) future earnings,discounted 
C) future earnings,compounded 
D) future dividend payments,discounted 
A) future dividend payments,compounded 
B) future earnings,discounted 
C) future earnings,compounded 
D) future dividend payments,discounted

Question 13

You have bought 1000 shares on margin at $50 per share,putting up $25 000.The stock price has increased to $65.If the margin rate is 50 percent,how much more will the broker lend you?

Accepted Answer

A) $0 
B) $15 000 
C) $7500 
D) $5000 
A) $0 
B) $15 000 
C) $7500 
D) $5000

Question 14

A firm with a low debt ratio relative to the industry norm has a high degree of financial leverage and therefore may have a relatively high risk of default.

Accepted Answer

A) True 
 B)False

Question 15

If the stock market is efficient,then fundamental analysis will be a good way to determine when stocks are well priced.

Accepted Answer

A) True 
 B)False

Question 16

Fundamental analysis is the valuation of stocks based on sensitivity of the firm's performance to economic conditions.

Accepted Answer

A) True 
 B)False

Question 17

Computer systems that match up buyers and sellers of stocks or bonds are

Accepted Answer

A) the NYSE Euronext exchange. 
B) the over-the-counter (OT
C) markets. 
C) the Toronto Stock Exchange. 
D) the national stock exchanges. 
A) the NYSE Euronext exchange. 
B) the over-the-counter (OT
C) markets. 
C) the Toronto Stock Exchange. 
D) the national stock exchanges.

Question 18

Which of the following is a limitation of the P/E method?

Accepted Answer

A) Finding the price of the stock 
B) Finding earnings per share information 
C) Difficulty forecasting earnings 
D) Changing dividend payouts 
A) Finding the price of the stock 
B) Finding earnings per share information 
C) Difficulty forecasting earnings 
D) Changing dividend payouts

Question 19

As long as you purchase the stock of a good company,it will be a good investment.

Accepted Answer

A) True 
 B)False

Question 20

One of the key ways to apply fundamental analysis is by

Accepted Answer

A) following an investor newsletter. 
B) tracking historical stock price trends. 
C) charting stock price patterns. 
D) using the dividend discount model. 
A) following an investor newsletter. 
B) tracking historical stock price trends. 
C) charting stock price patterns. 
D) using the dividend discount model.

An order to execute a transaction to buy or sell a stock at its prevailing price is called a

Floor traders no longer exist on the TSX because trades are now handled electronically.

Which technique for valuing stocks is used in technical analysis?

For most firms,having slightly more short-term assets versus short-term liabilities would be considered a reasonable current ratio.

The means by which the Canadian government imposes taxes on individuals and corporations and the way it spends tax revenues is the

Which of the following ratios measures efficiency?

In fundamental research you look for a stock that is

TD Bank pays an annual dividend of $2.12 at the rate of $0.53 quarterly.The stock is trading at $63.21.What is the effective annual yield?

If you need to be sure to buy shares of a company when the price rises above a certain level,you need to use a

Discuss investing on margin,illustrating the positives and negatives of this investing technique.Illustrate with a specific example.

Market makers are required to help make markets more liquid by taking the same position as those who want to buy or sell the stock.

The dividend discount model method is used to value a stock based on a firm's and is at an appropriate rate of interest.

You have bought 1000 shares on margin at $50 per share,putting up $25 000.The stock price has increased to $65.If the margin rate is 50 percent,how much more will the broker lend you?

A firm with a low debt ratio relative to the industry norm has a high degree of financial leverage and therefore may have a relatively high risk of default.

If the stock market is efficient,then fundamental analysis will be a good way to determine when stocks are well priced.

Fundamental analysis is the valuation of stocks based on sensitivity of the firm's performance to economic conditions.

Computer systems that match up buyers and sellers of stocks or bonds are

Which of the following is a limitation of the P/E method?

As long as you purchase the stock of a good company,it will be a good investment.

One of the key ways to apply fundamental analysis is by

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

An order to execute a transaction to buy or sell a stock at its prevailing price is called a

Floor traders no longer exist on the TSX because trades are now handled electronically.

Which technique for valuing stocks is used in technical analysis?

For most firms,having slightly more short-term assets versus short-term liabilities would be considered a reasonable current ratio.

The means by which the Canadian government imposes taxes on individuals and corporations and the way it spends tax revenues is the

Which of the following ratios measures efficiency?

In fundamental research you look for a stock that is

TD Bank pays an annual dividend of $2.12 at the rate of $0.53 quarterly.The stock is trading at $63.21.What is the effective annual yield?

If you need to be sure to buy shares of a company when the price rises above a certain level,you need to use a

Discuss investing on margin,illustrating the positives and negatives of this investing technique.Illustrate with a specific example.

Market makers are required to help make markets more liquid by taking the same position as those who want to buy or sell the stock.

The dividend discount model method is used to value a stock based on a firm's ________ and is ________ at an appropriate rate of interest.

You have bought 1000 shares on margin at $50 per share,putting up $25 000.The stock price has increased to $65.If the margin rate is 50 percent,how much more will the broker lend you?

A firm with a low debt ratio relative to the industry norm has a high degree of financial leverage and therefore may have a relatively high risk of default.

If the stock market is efficient,then fundamental analysis will be a good way to determine when stocks are well priced.

Fundamental analysis is the valuation of stocks based on sensitivity of the firm's performance to economic conditions.

Computer systems that match up buyers and sellers of stocks or bonds are

Which of the following is a limitation of the P/E method?

As long as you purchase the stock of a good company,it will be a good investment.

One of the key ways to apply fundamental analysis is by

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

Filters

The dividend discount model method is used to value a stock based on a firm's and is at an appropriate rate of interest.