Question 1

Assume the beta for the stock market in general is 1.0 and the beta for World-Wide Television Productions is 2.8.If the stock market increases in value by 5 percent,what is the expected increase in value for the World-Wide Productions stock?

Accepted Answer

A)  1 percent
B)  5 percent
C)  14 percent
D)  28 percent
E)  30 percentF) C) and D)
G) A) and C)

Question 2

Which of the following most likely does not charge a fee for you to access any of their information that may be used to evaluate a stock investment?

Accepted Answer

A)  Value Line
B)  Morningstar
C)  Yahoo! Finance
D)  Standard & Poor's
E)  ReutersF) All of the above
G) B) and C)

Question 3

Today most investors buy or sell stocks ________.

Accepted Answer

A)  in person at company headquarters
B)  online
C)  in person at NASDAQ
D)  in person at the full-service brokerage firm
E)  in person at the discount broker firmF) A) and B)
G) A) and C)

Question 4

Amy Farmer just received a legal form in the mail from a firm in which she owns stock.This form lists the issues to be decided at the annual stockholders' meeting and asks her to give written permission for someone else to vote for her if she cannot attend.What form has she received in the mail?

Accepted Answer

A)  Equity
B)  Proxy
C)  Voting rights
D)  Dividends
E)  Call optionF) D) and E)
G) None of the above

Question 5

A long-term technique used by investors who purchase an equal dollar amount of the same stock at equal intervals in time is called:

Accepted Answer

A)  dollar cost averaging.
B)  dividend reinvestment plan.
C)  buy and hold technique.
D)  regulated transaction.
E)  secured transaction.F) B) and C)
G) B) and D)

Question 6

An investment bank is a financial firm that assists corporations in raising funds,usually by helping to sell new security issues.

Accepted Answer

A) True 
 B)False

Question 7

A stock that sells for $5 or less per share is called a ________ stock.

Accepted Answer

A)  fractional
B)  penny
C)  dollar
D)  ten-dollar
E)  coinF) All of the above
G) B) and D)

Question 8

Both limit and _____orders may be good for one day,one week,one month,good until canceled,or a specified date.

Accepted Answer

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

Question 9

The beta for the S&P 500 is defined as:

Accepted Answer

A)  0
B)  1.0
C)  10.0
D)  50.0
E)  100.0F) A) and B)
G) A) and C)

Question 10

If Widget Corp.has a PEG value of .50,the stock is most likely:

Accepted Answer

A)  undervalued based on its projected growth rate.
B)  overvalued based on its projected growth rate.
C)  overvalued based on its $0.50 per share dividend.
D)  overvalued based on its good historical earnings.
E)  undervalued based on its poor historical earnings.F) B) and E)
G) C) and D)

Question 11

Fred Manufacturing Company pays an annual dividend of $0.80 per share,has earnings per share of $2.50,and sells for $35 a share.What is this company's dividend payout ratio?

Accepted Answer

A)  8 percent
B)  25 percent
C)  28 percent
D)  32 percent
E)  35 percentF) B) and D)
G) All of the above

Question 12

The federal government requires corporations selling new issues of securities to disclose information about itself in a prospectus.Which of the following must be disclosed?

Accepted Answer

A)  Corporate earnings
B)  Assets and liabilities
C)  Products or services
D)  Qualifications of top management
E)  All of these must be disclosed.F) A) and D)
G) B) and D)

Question 13

Describe information that may help you decide whether to use a full-service,discount,or online brokerage firm.

Accepted Answer

Full service: Beginning investors with l...

Question 14

Which one of the following statements is true?

Accepted Answer

A)  Corporate dividends for common stock must be paid in cash only.
B)  Stockholders must elect the board of directors.
C)  The selling price of stock is determined by how much the corporation is willing to receive.
D)  Corporations are required by law to have two stockholder meetings each year.
E)  Stockholders may vote only by proxy.F) B) and C)
G) A) and C)

Question 15

A large cap stock is a stock issued by a corporation that has a capitalization in excess of how much?

Accepted Answer

A)  $10 billion
B)  $20 billion
C)  $30 billion
D)  $40 billion
E)  $50 billionF) D) and E)
G) A) and B)

Question 16

A market order is a request to buy or sell a stock at the current market value.

Accepted Answer

A) True 
 B)False

Question 17

The book value for a share of stock is determined by deducting all liabilities from the corporation's assets and dividing the remainder by the number of outstanding shares of common stock.

Accepted Answer

A) True 
 B)False

Question 18

Dividends remain with the stock until:

Accepted Answer

A)  one business day before the date of record.
B)  two business days after the date of record.
C)  three days before the date of record.
D)  three days after the date of record.
E)  three days before the actual payment date.F) B) and D)
G) A) and B)

Question 19

Stock dividends are declared by the:

Accepted Answer

A)  chief financial officer.
B)  board of directors.
C)  stockholders.
D)  corporate employees.
E)  U) S.government.F) A) and D)
G) A) and C)

Question 20

Because of the need for secrecy,most corporations do not supply financial information about their company on their websites.

Accepted Answer

A) True 
 B)False

Exam 14: Investing in Stocks

The book value for a share of stock is determined by deducting all liabilities from the corporation's assets and dividing the remainder by the number of outstanding shares of common stock.

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Stock dividends are declared by the:

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Dividends remain with the stock until:

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Because of the need for secrecy,most corporations do not supply financial information about their company on their websites.

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An investment bank is a financial firm that assists corporations in raising funds,usually by helping to sell new security issues.

Correct AnswerverifiedShow Answer

Amy Farmer just received a legal form in the mail from a firm in which she owns stock.This form lists the issues to be decided at the annual stockholders' meeting and asks her to give written permission for someone else to vote for her if she cannot attend.What form has she received in the mail?

Correct AnswerverifiedShow Answer

If Widget Corp.has a PEG value of .50,the stock is most likely:

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Assume the beta for the stock market in general is 1.0 and the beta for World-Wide Television Productions is 2.8.If the stock market increases in value by 5 percent,what is the expected increase in value for the World-Wide Productions stock?

Correct AnswerverifiedShow Answer

The beta for the S&P 500 is defined as:

Correct AnswerverifiedShow Answer

Which one of the following statements is true?

Correct AnswerverifiedShow Answer

Both limit and _____orders may be good for one day,one week,one month,good until canceled,or a specified date.

Correct AnswerverifiedShow Answer

Fred Manufacturing Company pays an annual dividend of $0.80 per share,has earnings per share of $2.50,and sells for $35 a share.What is this company's dividend payout ratio?

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Describe information that may help you decide whether to use a full-service,discount,or online brokerage firm.

Correct AnswerverifiedFull service: Beginning investors with l...View AnswerShow Answer

Which of the following most likely does not charge a fee for you to access any of their information that may be used to evaluate a stock investment?

Correct AnswerverifiedShow Answer

The federal government requires corporations selling new issues of securities to disclose information about itself in a prospectus.Which of the following must be disclosed?

Correct AnswerverifiedShow Answer

A long-term technique used by investors who purchase an equal dollar amount of the same stock at equal intervals in time is called:

Correct AnswerverifiedShow Answer

A stock that sells for $5 or less per share is called a ________ stock.

Correct AnswerverifiedShow Answer

Today most investors buy or sell stocks ________.

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A market order is a request to buy or sell a stock at the current market value.

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A large cap stock is a stock issued by a corporation that has a capitalization in excess of how much?

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Full service: Beginning investors with l...
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