Question 1

A stock issued by a corporation that has the potential of earning above-average profits when compared to other firms in the economy is called a(n) ________ stock.

Accepted Answer

A)  defensive
B)  cyclical
C)  growth
D)  income
E)  blue chipF) A) and C)
G) All of the above

Question 2

Which of the following is an electronic marketplace for buying and selling global stocks and securities?

Accepted Answer

A)  New York Stock Exchange
B)  Over-the-counter market
C)  NASDAQ
D)  Tokyo foreign securities exchange
E)  London foreign securities exchangeF) A) and C)
G) D) and E)

Question 3

ABC Corporation has assets that total $24 million and liabilities that total $8 million.It also has 1,000,000 shares of stock outstanding.What is the ABC's book value per share?

Accepted Answer

A)  $32
B)  $24
C)  $16
D)  $8
E)  $0F) C) and D)
G) A) and D)

Question 4

Becky Martinez paid $65 a share for stock in GBX Corporation.The stock has a current market value of $24 a share and pays $0.80 a year in dividends per share.What is the dividend yield rounded to the nearest tenth of a percent?

Accepted Answer

A)  2.5 percent
B)  7.4 percent
C)  3.3 percent
D)  30.0 percent
E)  40.0 percentF) None of the above
G) B) and E)

Question 5

By using the internet,it is possible to find market price quotations,but more detailed financial information about a corporation is unavailable to the average investor.

Accepted Answer

A) True 
 B)False

Question 6

A large cap stock is a stock issued by a corporation that has capitalization of more than $10 billion.

Accepted Answer

A) True 
 B)False

Question 7

A safe investment that generally attracts conservative investors is called a ________ stock.

Accepted Answer

A)  penny
B)  cyclical
C)  growth
D)  small cap
E)  blue chipF) A) and B)
G) B) and E)

Question 8

Equity financing is a preferred choice to provide financing for a corporation because:

Accepted Answer

A)  a lender is always available to provide this type of financing.
B)  it does not have to be repaid.
C)  repayment doesn't have to be made for ten years or more.
D)  only interest must be paid for the first five years.
E)  it can wait five years before buying back the shares.F) B) and C)
G) C) and D)

Question 9

An investment theory based on the assumption that stock price movements are purely random is called the ________ theory.

Accepted Answer

A)  fundamental
B)  technical
C)  efficient market hypothesis
D)  primary
E)  marketF) C) and E)
G) A) and B)

Question 10

If a stock has a 2-for-1 split:

Accepted Answer

A)  the value of the stock is guaranteed to increase.
B)  the value of the stock is guaranteed to decrease.
C)  total market capitalization increases.
D)  total market capitalization decreases.
E)  total market capitalization does not change.F) A) and C)
G) A) and B)

Question 11

The record date is the date that the actual dividend payment is made to stockholders.

Accepted Answer

A) True 
 B)False

Question 12

Stock owners who believe the price of their stock will go down during an option period will purchase a:

Accepted Answer

A)  futures contract.
B)  long contract.
C)  call option.
D)  put option.
E)  margin contract.F) D) and E)
G) A) and E)

Question 13

A stock that pays higher-than-average dividends is called an income stock.

Accepted Answer

A) True 
 B)False

Question 14

Regardless of a stock's classification,a stock is a(n) ________ investment because there are no guarantees.

Accepted Answer

A)  speculative
B)  conservative
C)  substitute
D)  unwise
E)  soundF) B) and C)
G) B) and E)

Question 15

The most common stock split is:

Accepted Answer

A)  1-for-2
B)  2-for-1
C)  1-for-3
D)  4-for-1
E)  5-for-1F) A) and B)
G) B) and D)

Question 16

Orlando Blodgett is buying stock in the Getaway Caribbean Cruise Company today.He had thought about buying the stock yesterday and if he had,he would have received this quarter's dividend.However,since he waited until today,he will not receive that dividend payment.Given this information,which one of the following dates applies to this stock today?

Accepted Answer

A)  Record date
B)  Ex-dividend date
C)  Payment date
D)  Stock split date
E)  Stock repurchase dateF) A) and C)
G) A) and E)

Question 17

Which of the following uses algorithm-driven software to make investment suggestions that will match the investor's profile?

Accepted Answer

A)  Morningstar
B)  Reuters
C)  Market Watch
D)  Robo-Advisor
E)  Account ExecutiveF) B) and D)
G) A) and C)

Question 18

A low market-to-book ratio could indicate that a stock is undervalued.

Accepted Answer

A) True 
 B)False

Question 19

An order to sell a particular stock at the next available opportunity after the market price of the stock reaches a specified price is called a ________ order.

Accepted Answer

A)  market
B)  limit
C)  stop
D)  round
E)  discretionaryF) B) and D)
G) C) and E)

Question 20

Approximately ________ percent of earnings are distributed to stockholders as dividends by most corporations.

Accepted Answer

A)  10 to 20
B)  25 to 45
C)  30 to 70
D)  75 to 95
E)  100F) C) and E)
G) C) and D)

Exam 14: Investing in Stocks

Which of the following uses algorithm-driven software to make investment suggestions that will match the investor's profile?

Correct Answer
verified

Regardless of a stock's classification,a stock is a(n) ________ investment because there are no guarantees.

Correct Answer
verified

Which of the following is an electronic marketplace for buying and selling global stocks and securities?

Correct Answer
verified

By using the internet,it is possible to find market price quotations,but more detailed financial information about a corporation is unavailable to the average investor.

Correct Answer
verified

A safe investment that generally attracts conservative investors is called a ________ stock.

Correct Answer
verified

The most common stock split is:

Correct Answer
verified

Equity financing is a preferred choice to provide financing for a corporation because:

Correct Answer
verified

An order to sell a particular stock at the next available opportunity after the market price of the stock reaches a specified price is called a ________ order.

Correct Answer
verified

A stock issued by a corporation that has the potential of earning above-average profits when compared to other firms in the economy is called a(n) ________ stock.

Correct Answer
verified

A low market-to-book ratio could indicate that a stock is undervalued.

Correct Answer
verified

Becky Martinez paid $65 a share for stock in GBX Corporation.The stock has a current market value of $24 a share and pays $0.80 a year in dividends per share.What is the dividend yield rounded to the nearest tenth of a percent?

Correct Answer
verified

Stock owners who believe the price of their stock will go down during an option period will purchase a:

Correct Answer
verified

The record date is the date that the actual dividend payment is made to stockholders.

Correct Answer
verified

Correct Answer
verified

Approximately ________ percent of earnings are distributed to stockholders as dividends by most corporations.

Correct Answer
verified

If a stock has a 2-for-1 split:

Correct Answer
verified

An investment theory based on the assumption that stock price movements are purely random is called the ________ theory.

Correct Answer
verified

A stock that pays higher-than-average dividends is called an income stock.

Correct Answer
verified

ABC Corporation has assets that total $24 million and liabilities that total $8 million.It also has 1,000,000 shares of stock outstanding.What is the ABC's book value per share?

Correct Answer
verified

A large cap stock is a stock issued by a corporation that has capitalization of more than $10 billion.

Correct Answer
verified

Exam 14: Investing in Stocks

Which of the following uses algorithm-driven software to make investment suggestions that will match the investor's profile?

Correct AnswerverifiedShow Answer

Regardless of a stock's classification,a stock is a(n) ________ investment because there are no guarantees.

Correct AnswerverifiedShow Answer

Which of the following is an electronic marketplace for buying and selling global stocks and securities?

Correct AnswerverifiedShow Answer

By using the internet,it is possible to find market price quotations,but more detailed financial information about a corporation is unavailable to the average investor.

Correct AnswerverifiedShow Answer

A safe investment that generally attracts conservative investors is called a ________ stock.

Correct AnswerverifiedShow Answer

The most common stock split is:

Correct AnswerverifiedShow Answer

Equity financing is a preferred choice to provide financing for a corporation because:

Correct AnswerverifiedShow Answer

An order to sell a particular stock at the next available opportunity after the market price of the stock reaches a specified price is called a ________ order.

Correct AnswerverifiedShow Answer

A stock issued by a corporation that has the potential of earning above-average profits when compared to other firms in the economy is called a(n) ________ stock.

Correct AnswerverifiedShow Answer

A low market-to-book ratio could indicate that a stock is undervalued.

Correct AnswerverifiedShow Answer

Becky Martinez paid $65 a share for stock in GBX Corporation.The stock has a current market value of $24 a share and pays $0.80 a year in dividends per share.What is the dividend yield rounded to the nearest tenth of a percent?

Correct AnswerverifiedShow Answer

Stock owners who believe the price of their stock will go down during an option period will purchase a:

Correct AnswerverifiedShow Answer

The record date is the date that the actual dividend payment is made to stockholders.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Approximately ________ percent of earnings are distributed to stockholders as dividends by most corporations.

Correct AnswerverifiedShow Answer

If a stock has a 2-for-1 split:

Correct AnswerverifiedShow Answer

An investment theory based on the assumption that stock price movements are purely random is called the ________ theory.

Correct AnswerverifiedShow Answer

A stock that pays higher-than-average dividends is called an income stock.

Correct AnswerverifiedShow Answer

ABC Corporation has assets that total $24 million and liabilities that total $8 million.It also has 1,000,000 shares of stock outstanding.What is the ABC's book value per share?

Correct AnswerverifiedShow Answer

A large cap stock is a stock issued by a corporation that has capitalization of more than $10 billion.

Correct AnswerverifiedShow Answer

Correct Answer
verified

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