Question 1

A defensive stock is a stock that typically sells for less than $5.

Accepted Answer

A) True 
 B)False

Question 2

ABC Corporation holds its annual meeting in April.Maxine Star,who owns stock in the company,cannot attend the meeting.She can vote by:

Accepted Answer

A)  voluntary certificate.
B)  preemptive right.
C)  proxy.
D)  cumulative certificate.
E)  participatory certificate.F) A) and E)
G) A) and D)

Question 3

A market in which an investor purchases financial securities from the issuer of those securities using an investment bank or other representative is called the ________ market.

Accepted Answer

A)  technical
B)  fundamental
C)  efficient
D)  secondary
E)  primaryF) A) and C)
G) A) and E)

Question 4

Which order is executed if and when the specified price or better is reached and all other previously received orders have been fulfilled?

Accepted Answer

A)  Market
B)  Limit
C)  Stop
D)  Round
E)  DiscretionaryF) A) and B)
G) A) and C)

Question 5

On May 24,2018,Kurt Rogers bought 100 shares of stock from XYZ Corporation.The quarterly dividend is $1.50 per share and the record date is May 25.How much will Kurt receive for this quarterly dividend?

Accepted Answer

A)  $0.00
B)  $1.50
C)  $15.00
D)  $150.00
E)  $0.15F) D) and E)
G) B) and D)

Question 6

An investment theory based on the assumption that a stock's market value is determined by the forces of supply and demand in the stock market as a whole is called the ________ theory.

Accepted Answer

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

Question 7

After a 2-for-1 stock split:

Accepted Answer

A)  earnings per share decrease.
B)  earnings per share increase.
C)  capitalization decreases.
D)  capitalization increases.
E)  dividend yields decrease.F) B) and E)
G) All of the above

Question 8

Ashley Riley wants to buy the stock of XYZ Company at a specified price or better.What type of order should she place?

Accepted Answer

A)  Market order
B)  Limit order
C)  Stop order
D)  Discretionary order
E)  Common orderF) A) and B)
G) A) and C)

Question 9

The Arnold Fertilizer Company's stock is selling for $64 in the market and its earnings per share is $8.The company is projected to grow at a rate of 16% over the next year.What is this company's price/earnings to growth ratio?

Accepted Answer

A)  8.00
B)  6.40
C)  0.50
D)  16.00
E)  64.00F) B) and E)
G) B) and C)

Question 10

Before a 2-for-1 stock split,Lisa's stock was valued at $60 per share.What is her per share value after the split?

Accepted Answer

A)  $30
B)  $60
C)  $90
D)  $120
E)  $150F) A) and D)
G) A) and B)

Question 11

On May 20,2018,Tony Blackman bought 100 shares of stock from XYZ Corporation.The quarterly dividend is $1.50 per share and the record date is May 25.How much will Tony receive for this quarterly dividend?

Accepted Answer

A)  $0.00
B)  $1.50
C)  $15.00
D)  $150.00
E)  $0.15F) A) and D)
G) None of the above

Question 12

The beta is a measure that compares the volatility associated with a specific stock issue with the volatility of the S&P 500 Stock Index.

Accepted Answer

A) True 
 B)False

Question 13

A call option gives the purchaser the right to sell 100 shares of a stock at a guaranteed price before a definite expiration date.

Accepted Answer

A) True 
 B)False

Question 14

A securities exchange is a marketplace where member brokers,who represent investors,meet to buy and sell securities.

Accepted Answer

A) True 
 B)False

Question 15

A blue chip stock is too speculative for most investors.

Accepted Answer

A) True 
 B)False

Question 16

The fundamental analysis theory is based on the assumption that a stock's intrinsic or real value is determined by the future earnings of the company.

Accepted Answer

A) True 
 B)False

Question 17

Regarding a stock split,the earnings "pie" before the split is ________ size after the split.

Accepted Answer

A)  a smaller
B)  a larger
C)  double the
D)  the same
E)  unrelated to theF) A) and B)
G) A) and C)

Question 18

A long-term investment technique used by investors to purchase stock directly from a corporation without paying a commission to an account executive or broker is called:

Accepted Answer

A)  dollar cost appreciation.
B)  direct investment plan.
C)  unregulated transaction.
D)  regulated transaction.
E)  over-the-counter transaction.F) None of the above
G) A) and C)

Question 19

Since the end of World War II,stocks have returned almost 10 percent a year.

Accepted Answer

A) True 
 B)False

Question 20

Assume that you purchased 100 shares of a stock for $60 a share,that you did not receive any dividends,and that you sold your stock for $70 a share at the end of one year.What is the total return for your investment?

Accepted Answer

A)  $60
B)  $70
C)  $100
D)  $700
E)  $1,000F) A) and D)
G) B) and E)

Exam 14: Investing in Stocks

The Arnold Fertilizer Company's stock is selling for $64 in the market and its earnings per share is $8.The company is projected to grow at a rate of 16% over the next year.What is this company's price/earnings to growth ratio?

Correct AnswerverifiedShow Answer

On May 20,2018,Tony Blackman bought 100 shares of stock from XYZ Corporation.The quarterly dividend is $1.50 per share and the record date is May 25.How much will Tony receive for this quarterly dividend?

Correct AnswerverifiedShow Answer

On May 24,2018,Kurt Rogers bought 100 shares of stock from XYZ Corporation.The quarterly dividend is $1.50 per share and the record date is May 25.How much will Kurt receive for this quarterly dividend?

Correct AnswerverifiedShow Answer

A long-term investment technique used by investors to purchase stock directly from a corporation without paying a commission to an account executive or broker is called:

Correct AnswerverifiedShow Answer

Before a 2-for-1 stock split,Lisa's stock was valued at $60 per share.What is her per share value after the split?

Correct AnswerverifiedShow Answer

An investment theory based on the assumption that a stock's market value is determined by the forces of supply and demand in the stock market as a whole is called the ________ theory.

Correct AnswerverifiedShow Answer

A market in which an investor purchases financial securities from the issuer of those securities using an investment bank or other representative is called the ________ market.

Correct AnswerverifiedShow Answer

ABC Corporation holds its annual meeting in April.Maxine Star,who owns stock in the company,cannot attend the meeting.She can vote by:

Correct AnswerverifiedShow Answer

The beta is a measure that compares the volatility associated with a specific stock issue with the volatility of the S&P 500 Stock Index.

Correct AnswerverifiedShow Answer

A call option gives the purchaser the right to sell 100 shares of a stock at a guaranteed price before a definite expiration date.

Correct AnswerverifiedShow Answer

Assume that you purchased 100 shares of a stock for $60 a share,that you did not receive any dividends,and that you sold your stock for $70 a share at the end of one year.What is the total return for your investment?

Correct AnswerverifiedShow Answer

Ashley Riley wants to buy the stock of XYZ Company at a specified price or better.What type of order should she place?

Correct AnswerverifiedShow Answer

A blue chip stock is too speculative for most investors.

Correct AnswerverifiedShow Answer

Since the end of World War II,stocks have returned almost 10 percent a year.

Correct AnswerverifiedShow Answer

The fundamental analysis theory is based on the assumption that a stock's intrinsic or real value is determined by the future earnings of the company.

Correct AnswerverifiedShow Answer

A defensive stock is a stock that typically sells for less than $5.

Correct AnswerverifiedShow Answer

Which order is executed if and when the specified price or better is reached and all other previously received orders have been fulfilled?

Correct AnswerverifiedShow Answer

A securities exchange is a marketplace where member brokers,who represent investors,meet to buy and sell securities.

Correct AnswerverifiedShow Answer

Regarding a stock split,the earnings "pie" before the split is ________ size after the split.

Correct AnswerverifiedShow Answer

After a 2-for-1 stock split:

Correct AnswerverifiedShow Answer

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