Question 1

A stock issued by a corporation that has a market capitalization of between $2 and $10 billion is called a ____________ stock.

Accepted Answer

A)  defensive
B)  midcap
C)  growth
D)  income
E)  blue chipF) A) and B)
G) B) and E)

Question 2

Ms.Hart's stock club uses numerous charts that plot past price movements and other market averages to predict the future direction for the market as a whole.Her club relies on _______ analysis to determine stock selections.

Accepted Answer

A)  fundamental
B)  technical
C)  efficient market
D)  chart
E)  plotF) C) and E)
G) None of the above

Question 3

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 4

Mary Smith purchased 200 shares of Johnson electronics four years ago at $30.00 each.She paid a $30 commission on this transaction.She has decided to sell these shares at $50.00 each and will incur a $25 commission on this sale.What is the amount of her capital gain?

Accepted Answer

A)  $3,945
B)  $6,000
C)  $6,030
D)  $9,975
E)  $10,000F) A) and D)
G) A) and C)

Question 5

Sean Rouse owns shares of common stock in Stowaway Transportation Company.The company is getting ready to pay a dividend.Sean knows he must be registered on the corporation's books on the _______ date in order to receive the dividend.

Accepted Answer

A)  record
B)  ex-dividend
C)  payment date
D)  declaration
E)  stockholders' meetingF) A) and E)
G) C) and E)

Question 6

The Arnold Fertilizer Company's stock is selling for $55 in the market and its earnings per share is $5.The company is projected to grow at a rate of 22% over the next year.What is this company's price/earnings to growth ratio?

Accepted Answer

A)  11.00
B)  9.09
C)  0.50
D)  50.00
E)  22.73F) C) and D)
G) B) and E)

Question 7

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) All of the above
G) A) and E)

Question 8

Stocks issued by large corporations in mature industries often have high P-E ratios.

Accepted Answer

A) True 
 B)False

Question 9

Today most investors either trade _____ or telephone their account executives.

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) None of the above

Question 10

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) None of the above
G) A) and B)

Question 11

Stock dividends are determined by the:

Accepted Answer

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

Question 12

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 13

Anthony Edwards wants to diversify his portfolio by adding a stock that maintains stable earnings when the economy declines.What type of stock does Anthony want to add to his portfolio?

Accepted Answer

A)  Defensive stock
B)  Cyclical stock
C)  Small-cap stock
D)  Blue chip stock
E)  Growth stockF) None of the above
G) D) and E)

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) A) and B)
G) A) and C)

Question 15

Initial public offerings are a ___________ investment.

Accepted Answer

A)  guaranteed
B)  speculative
C)  safe
D)  conservative
E)  blue chipF) D) and E)
G) A) and B)

Question 16

A limit order is a request to buy or sell stock at a specified price or better.

Accepted Answer

A) True 
 B)False

Question 17

On May 20,2015,Tony Blackman bought 100 shares of stock from XYZ Corporation.The quarterly dividend is $1.25 per share and the record date is May 25.How much will Tony receive for this quarterly dividend?

Accepted Answer

A)  $0.00
B)  $1.25
C)  $12.50
D)  $125.00
E)  $0.13F) C) and D)
G) A) and D)

Question 18

Dollar cost averaging helps investors avoid the pitfall of buying high and selling low.

Accepted Answer

A) True 
 B)False

Question 19

The beta for the S&P 500 is:

Accepted Answer

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

Question 20

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) A) and E)
G) A) and D)

Exam 14: Investing in Stock

A limit order is a request to buy or sell stock at a specified price or better.

Correct AnswerverifiedShow Answer

The Arnold Fertilizer Company's stock is selling for $55 in the market and its earnings per share is $5.The company is projected to grow at a rate of 22% over the next year.What is this company's price/earnings to growth ratio?

Correct AnswerverifiedShow Answer

On May 20,2015,Tony Blackman bought 100 shares of stock from XYZ Corporation.The quarterly dividend is $1.25 per share and the record date is May 25.How much will Tony receive for this quarterly dividend?

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

Mary Smith purchased 200 shares of Johnson electronics four years ago at $30.00 each.She paid a $30 commission on this transaction.She has decided to sell these shares at $50.00 each and will incur a $25 commission on this sale.What is the amount of her capital gain?

Correct AnswerverifiedShow Answer

Sean Rouse owns shares of common stock in Stowaway Transportation Company.The company is getting ready to pay a dividend.Sean knows he must be registered on the corporation's books on the _______ date in order to receive the dividend.

Correct AnswerverifiedShow Answer

Stock dividends are determined by the:

Correct AnswerverifiedShow Answer

Initial public offerings are a ___________ investment.

Correct AnswerverifiedShow Answer

Anthony Edwards wants to diversify his portfolio by adding a stock that maintains stable earnings when the economy declines.What type of stock does Anthony want to add to his portfolio?

Correct AnswerverifiedShow Answer

Ms.Hart's stock club uses numerous charts that plot past price movements and other market averages to predict the future direction for the market as a whole.Her club relies on _______ analysis to determine stock selections.

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

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

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

Stocks issued by large corporations in mature industries often have high P-E ratios.

Correct AnswerverifiedShow Answer

Today most investors either trade _____ or telephone their account executives.

Correct AnswerverifiedShow Answer

A stock issued by a corporation that has a market capitalization of between $2 and $10 billion is called a ____________ stock.

Correct AnswerverifiedShow Answer

Dollar cost averaging helps investors avoid the pitfall of buying high and selling low.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Which one of the following statements is true?

Correct AnswerverifiedShow Answer

The beta for the S&P 500 is:

Correct AnswerverifiedShow Answer

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